Rents Are Rocketing, Too
Don’t let Labour’s plot to steal wealth from buy-to-let landlords cloud the real landlord news. The length of the average void period in the UK has collapsed to only 11 days, and rental prices are rocketing.
Goodlord Finds Void Periods Have Collapsed
Goodlord – the property technology company whose products include Goodlord Switch, an energy and void management application – has seen that the average void period in August is now only 11 days. This is down on the three weeks it measured in May.
Goodlord’s products are available to letting agents, and these latest numbers make it clear that using a letting agent is the best way to reduce void periods. A letting agent doesn’t have to start from scratch when letting an existing property at the end of an existing tenancy.
For example, when a tenant gives notice in a property that we manage, we swing into action immediately. We put our network of local agents on alert. Often, they have potential tenants ready and waiting to move in.
We can pre-vet the new tenants, draw up tenancy agreements, and get the ball rolling almost from the day that notice is given. Products like Goodlord Switch help us to manage void periods more effectively.
The only real delay is the need to have the property vacant to carry out any essential maintenance and decoration. Compare this to the private landlord, who must do a tonne of expensive preparation, marketing and vetting before signing a new tenancy agreement with new tenants.
Where Are Void Periods Shortest and Rents Highest?
If you own a property in the South West, give yourself a pat on the back. Goodlord found that the average void period in this region was only five days in August. Five days! Your tenant leaves over a weekend, and you have a new tenant by Friday the following week.
This short period is helped by the access that letting agents and property managers have to call the professionals needed to turn the property around between tenants. Cleaners, maintenance, repairs, and, of course, switching utilities and other bills.
Not only has the average void period collapsed in the South West (the previous year’s low was nine days), rents have increased by a huge amount. The South West’s average rent was recorded on Goodlord’s systems as £942 in July. In August, this average was 20% higher at £1,126 per month.
In the North East, void periods also hit a record low, of just seven days. Average rents here did even better than in the South West, rising a whopping 36% to £897 in August.
The news from Goodlord isn’t so good if you own property in the West Midlands, where the average void period in August was measured at 15 days. However, even this number is way below the average for the year of 24 days.
Landlords in London receive the highest average rents, with an increase of 5% from July to £1,684. Landlords in the West Midlands receive the lowest average monthly rent of £722 per month.
Full Steam Ahead in Buy-To-Let
These numbers show that the buy-to-let market is powering ahead:
- The demand for rental properties continues to grow
- Rents continue to rise, as we predicted they would last year
- The effect of the tenant fee ban is washing through the market
- Higher-value properties are coming to the market, as buy-to-let investors seek better-quality tenants and higher rewards
- Homeowners are turning to letting properties that are not finding buyers in a stagnant market
So, it’s full steam ahead in buy-to-let, but could a Labour government cause the private rented sector (PRS) to collapse? The latest crackpot policy announced by Labour – this time by shadow chancellor John McDonnell – is to give tenants in the PRS the right to buy their properties at a massive discount from market value.
He says that Labour wants to “tackle the burgeoning buy-to-let market”. How would it work? He says, “You’d want to establish what is a reasonable price, you can establish that and then that becomes the right to buy. You [the government] set the criteria. I don’t think it’s complicated.”
Only one problem: who would foot the bill? It would be the taxpayer. And, of course, instead of stabilising the PRS, it would cause an even larger imbalance. Demand for rental properties would explode, as people seek to rent so they can buy at a massive discount. Marxian economics at their finest.
Our advice is to ignore Labour. Their policies are populist, designed to win votes and not designed to be put into action. Instead, concentrate on providing the best property you can to the best tenants you can find, as quickly as you can find them. To learn how to do this effortlessly, contact Ezytrac today at +44 0 1522 503 717
Yours in Effortless Property Management,