What’s the Future for the Lettings Industry?

publication date: Aug 3, 2010
 | 
author/source: Kate Faulkner, Property Expert and Author of Which? Property Books
Download

What’s the Future for the Lettings Industry?

An inteview with Graham Norwood Property Journalist

Unlike many so called ‘property journalists’ Graham really understands how the property market works and doesn’t believe the media hype about ‘death of buy to let’. “I think it’s a great time to be in buy to let, but I do think things are changing and the days of being an ‘amateur landlord’ or ‘an armchair investor’ are gone”.

The future for existing landlords is superb as Graham is already seeing a shortage of stock in many places for tenants, and letting agents seem to be struggling to achieve the levels of lets they have had in the last few years. Although stock levels may be lower, this will naturally cause rents to rise, and as a result Graham is confident turnover (and profit) for both letting agents and landlords will increase in the future.

Less stock and an increased number of agents offering lettings has inevitably led to increased competition. Graham says “I find it difficult to differentiate between agents these days; they all seem to offer the same service. One thing that I’d like to see is more regulation for letting agents, especially in view of the number of agents that have run off with tenant (and landlord) cash in the last 18 months!”.

So who will look after landlords’ properties in the future? Graham’s view is corporate letting agents will continue to expand while one off, independent offices and networks will operate more in concert with each other – or be bought by the corporate crowd. Graham firmly believes that the future of lettings is part internet, part office, he doesn’t subscribe to the view that agents will all be replaced by the internet.

What about landlords? Will people continue to invest in buy to let? Graham thinks the days of ‘spending spare cash’ on property for those in their 20s and 30s is over. “Post the millennium, it seemed anyone who had inherited or saved £20,000 or more wanted to invest it in property. The impact of the credit crunch will be that many people won’t be quite so keen, so buy to let property stock will increase over time, but mostly from existing landlords or institutional investment rather than new investors entering the market.”

Graham has written many times about the increased legislation for landlords and letting agents, but he thinks this is now at an end. “This government has much bigger fish to fry. The Prime Minister seems to take the view that second homes, be it for politicians or anyone else is ‘socially unacceptable’! We’ll know by June 22nd, but landlords need to brace themselves for a hike in Capital Gains and tax on rental income.”

Overall, from Graham’s perspective the future of lettings is extremely exciting for letting agents that really concentrate on offering a great service to landlords and in turn, for landlords that offer tenants a great place to live.

Additional Information
  

Will the internet mean shops become extinct?

The internet, although it will work well for flat or house sharers, Graham knows “with sites such as Rightmove having great control over the market and agents being located on the high street, it will always be difficult for on-line sites to have a critical mass to wipe out agents.”

Top Five Tips for Letting Agents


1.   Please explain and then explain again what your fees are for! If I use an agent for many years, many forget to remind me what exactly it is that they do. That means it’s easy to forget what I’m paying for!

2.   Estate agents are much better at raising their profile in the community and with the press. It’s about time that senior, expert letting agents did the same!

3.   Diversify. Residential lettings is great business, but with the potential decline of stock, managing blocks of flats and properties, especially as institutional investment expands, will be essential to the growth of your business.

4.   Work with developers that are looking to create a constant cash flow by building to let.

5.   Consider creating joint ventures with universities, developers and local authorities so everyone can deliver great customer service to both tenants and corporate or residential landlords.

Top Five Tips for Landlords


1.   Use a letting agent – get rid of the responsibility and hassle, who wants to be contacted at 9.30pm on a Saturday night to fix a leaking tap?

2.   To make money from buy to let in the future, landlords can’t ‘just buy anything’. It’s all about research and ensuring that the property pays back even after the government has taken their share of your earnings in tax?

3.   Have a very clear idea of which types of tenants you are targeting and know the rental market you are operating like the back of your hand.

4.   Don’t skimp on maintenance or repairs, it’s easy to do a ‘quick fix’ but it’ll come back to bite your bank balance with a vengeance!

5.   Investing in buy to let is a long term venture – 10 years or more, so don’t expect quick returns!

What are the first three things you would do if you were the Housing Minister?

1.   Build more council houses!

2.   Create an environment where letting privately is recognised as a valuable contribution to the local community. For example, improve the financing structure for buy to let investors keen to provide rental property for the future.

3.   Stop and reverse some of the legislative burden on a landlord that doesn’t improve life for tenants, just increases costs and acts as a disincentive to let property.

Graham Norwood

Graham Norwood - Property Journalist
Propertynewshound.com

Graham has been a journalist for over 20 years and writes on residential property for newspapers, magazines, websites and blogs in the UK and across the world.


He specialises in writing about property markets and has 10 years experience of the residential industry. Today in the UK Graham is a frequent contributor to the Daily Telegraph and Sunday Telegraph, the Financial Times, the Daily Mail, The Independent, The Guardian and The Observer.

Around the world you can see his weekly column in the Emirates Business 24/7 newspaper and website in Dubai, as well as regular articles in The Wall Street Journal and the Irish Sunday Business Post.

He also appears frequently in industry publications, notably Estates Gazette, and undertakes writing for industry bodies like the National Housing and Planning Advice Unit. Graham's latest book, Profiting from Property in a Recession, is the fourth he has written on the property business.

Graham has written
three other books on property, is an occasional guest on radio programmes about housing, and is a buy-to-let landlord in the UK.


 

Need help with a property problem? Have a question? Why not call Designs on Property on 01652 641 722 or Contact Us via email.
Kate's Consumer Portal

Propertychecklists.co.uk

FREE Buy to Let eBooks

Download a copy of our
Buy to Let Show eBooks
for FREEsimply click on
the image below

Buy to Let Show - download our Buy to Let eBook for FREE