By Ashley Smith, lettings manager of Arnolds chartered surveyors in Norwich
In the last 10 years the Residential Lettings market has grown substantially, and both tenants and landlords have quite rightly demanded ever higher standards from their professional advisers. Also, with the introduction of new legislation such as laws governing Houses in Multiple Occupations (HMO), Damage Deposit Registration and most recently the requirement for all rented
property to carry an Energy Performance Certificate, Agents and Landlords have had to take a more professional view of their rental investments. It is inevitable that with an increased interest from the Government in the lettings industry that compulsory licensing of Agents will soon be coming into force. Arnolds supports this initiative, as it will have the effect of raising standards further still, and weeding out rogue Agents and those who are in lettings just to make a fast buck. As a Landlord it is therefore important that you pick an agent who is a member of a professional body such as RICS, NAEA, ARLA and NALS so that you can make sure they are bound by their members practice agreement to act in your best interests at all times.
Rents have risen steadily over the last 8 years, until around 12 months ago when a sudden increase in the supply of property into the rental market saw rents slightly decrease. Why is this? New build one and two bedroom apartments saturated the market in 2008 and early 2009, and with many properties unsold due to the economy, market conditions and/or negative equity, many would-be sellers became reluctant landlords in order to pay the bills. At the same time, with unemployment high and jobs not as secure as they once were, some tenants decided to sit tight and not risk increasing their outgoings.
The residential sales market is much more buoyant now than in the last 2 years, and some landlords who rented out because they could not sell, are now considering their options. It is once again a good time to buy for investors, as there are a number of such properties coming on the market to sell that already have tenants in residence. The internal and external condition of the property is key to attracting a good tenant. If you have a property which looks as though it has been left behind in another era then now is the time to invest in a makeover. This will also make it easier to achieve the best rent level, maximising your return.
My top three recommendations to any existing or potential investment Landlord would be (1) aim to buy in an established area with proven success in the rental market, (2) make sure that the property is in good clean condition throughout (or the purchase price allows for investment in the necessary improvements), (3) approach a qualified professional Letting Agent before you purchase the property to find out as much as you can about the pros and cons of what you are considering and also what the return is likely to be.
Ashley is on 01603 620551