Stick, Sell or Buy

Stick, sell or buy a decision many residential landlords are considering as we move closer to the end of another tax year.

We are seeing great pressures being put on landlords from a national point of view, may it be increased taxation on rents received, increased stamp duty land tax on second home purchases, no huge increases in capital values locally and rents only inching up. We then have the traditional issues of late or non-payment by tenants and the risks of not finding the ‘perfect’ tenant, this coupled with the seemingly never ending deluge of legislation effecting the private rented sector why would you consider this as a viable sector of the market to invest your hard earned money?

At Northwood we are currently liquidating a couple of portfolios for landlord investors and have found no end of willing investors looking to purchase these properties often with tenants in situ. In this instance the investors don’t lose any rent, have no empty period and any maintenance carries on in the normal way as required by the property, in some instances we are seeing gross rental returns in excess of 7% a return difficult to match, before any potential capital growth in the resale value of the property.

Latest statistics have revealed that currently around a fifth of families are renting their home from a private landlord, this is expected to grow to around one third of families renting within the private sector by 2032 (*), suggesting that the market place is further looking to grow over the foreseeable future.

As more and more professional landlords enter the market they are driven by a couple of main factors, they obviously want a good financial return on their spend but further more need the reassurance of excellent property management to keep their property in tip top order protecting their investment. These professional landlords understand the importance of good management and can see the strength, value and reliability of Northwood’s Guaranteed Rental Scheme. The last thing an investor landlord is looking to do is be involved with their tenants on a day to day basis, the hands off solution offered by the Guaranteed Rent scheme is ideal for the busy investor landlord.

“One of a landlord’s biggest worries will always be a nightmare tenant which can be enough to put off many even entering the lettings market”, says Steven Swann, of leading property business Northwood in Hartshill. “But there is a simple solution that gives landlords a stress free way to let their properties and still reap the rewards.”

The Guaranteed Rent Scheme is a unique package from Northwood that not only guarantees monthly rental payments for the duration of the agreement – regardless of whether they have tenants in situ, and regardless of whether the tenant pays – but also assumes other contractual responsibilities.

“It works by Northwood in effect becoming your tenant. What this means for landlords is that they don’t have the stress of worrying about tenants not paying or arranging any legal action that may be required if a tenant refuses to vacate or breaks the terms of their contract.

“The package has proved invaluable to our clients particularly when tenants struggle to make payments to cover their rent. As the buy-to-let market goes through a period of change, we anticipate more and more landlords seeing the benefits from the Guaranteed Rent scheme”, concludes Steven Swann.

Northwood, one of the largest and fastest growing lettings businesses in the UK, has been operating for over 21 years and has more than 80 offices across the country.