The Dundee office of property specialists, Belvoir, will be part of a nationwide drive to integrate the private rented sector more positively into the government’s housing plans for 2017.
Despite government changes and fresh challenges in the ‘buy-to-let’ market, the future for rented property will continue to be one of the best bets for the country’s growing number of tenants as well as landlords, says the company.
“We’re starting the new year with more optimism than we’ve had for some time,” says Nick Horan, who owns the Belvoir office on Union Street in Dundee.
“Although the market is likely to be slowed down by the threat of stricter ‘buy-to-let’ rules – including tougher affordability checks for buy to let mortgages and the withdrawal of tax relief on mortgage interest – we are still reporting an increase in demand for houses to rent.
“If you are a cash investor, or perhaps an ‘accidental landlord’ who has inherited a property with no mortgage repayments, you can expect a very healthy return on your investment – far better than you could achieve from mainstream savings products.
“So, a priority in 2017 will be to carry on sourcing more local, good quality rental accommodation to satisfy both landlord and tenant client demand across the board.”
Recent figures suggest an encouraging rise in the number of rental properties coming onto the UK market in nearly 60 per cent of UK towns and cities. And although rents are rising modestly they are, nevertheless, rising. In fact, Belvoir predicts a 15 per cent rise over the next three years.
Some 86% of Belvoir’s tenants, nationally – that’s around 6 million households – are renting because they cannot scrape together the deposit to buy a property. And a Labour-backed inquiry into the nation’s housing crisis revealed that almost two-thirds of UK tenants don’t expect to afford a mortgage in the next five years either.
That includes all walks of life – from professionals with families to students and migrant workers. They are struggling to buy so, in the next 12 months, they will follow the European model and rent instead.
Meanwhile, government housebuilding targets have let them down again. A House of Lords committee called for 300,000 new homes to be built in England each year – but in 2015-16 just under 190,000 new properties were added to the housing stock. Scotland is doing better but demand still outstrips supply.
“That’s why a closer dialogue is needed with government,” says Belvoir’s managing director, Dorian Gonsalves. “The private rented sector plugs a serious gap and provides essential good quality, affordable housing for a modern generation of tenants while opening up new opportunities for people who can invest in ‘buy-to-let’ properties.”
In 2017 Belvoir will continue to work with decision makers and strive to help create new incentives for the increased supply of rented housing stock. This will benefit millions of private tenants in a rental sector that could become healthier than ever in the next 12 months.
“But, more than ever, new property investors will need to have a very clear strategy, in terms of what they expect from rental returns and capital growth,” adds Nick. “Renting in 2017 is expected to be an increasingly real alternative to home ownership but landlords need to buy property at the right price and thoroughly research its marketability.
“This is where local market knowledge becomes an all-important key – and it’s where the expertise of a specialist agent like Belvoir can make a real difference in guiding investors through a maze of opportunities and potential pitfalls.
“We anticipate more self-managing landlords will answer the new challenges and changes in legislation by turning towards professional agents with local and regional understanding, insight and experience, who they can trust to handle the increasing burden of new rules and red tape.”
Dorian Gonsalves says: “It’s against this mixed background that our collective of over 300 offices throughout the entire country is hoping to make our influential voice heard more clearly at national government level this year because Belvoir is a major brand and a respected representative of this key sector in UK housing.
“We are optimistic that we can improve prospects for tenants as well as landlords and I’m confident that the Belvoir network will continue to build on this during another positive year of successful growth.”
