As the year draws to an end it is time to start planning for the next one. So, here is our forecast for what’s in store for Landlords in 2018.
We believe that many of the changes set to be introduced to buy-to-let in 2018 will be hugely beneficial in the long term and that 2018 has the potential to be a great year for landlords.
Despite previous years being marked by declarations that “the death of buy-to-let” was upon the industry, landlords have continued to enjoy healthy rental yields while performing what is an essential service to millions of tenants across the UK.
Whilst longer tenancies aren’t exactly new, the fact that 12 months tenancies will now be standard should be welcomed all round. We truly believe that from the landlord’s perspective, it’s better to have the security of knowing your property is let, albeit without a regular % increase in the rent, than it is to enjoy 5% income rises but with the risk of costly void periods. It’s all about looking at the bigger picture and in this instance, your profit and loss account.
Changes to Tenant Referencing
Both houses of parliament recently held debates about how tenants can be helped to improve their credit scores by requiring credit referencing agencies to add tenant’s rent payments to their credit histories and, therefore, help improve their chances of accessing affordable finance.
The government is to spend £2 million to help make this a reality. We believe that changes to the tenant referencing will help landlords let to reliable rent payers, irrespective of their overall financial circumstances.
The government is keen to see more high-quality rental properties come on to the market to offer more choice to ‘generation rent’. One outcome of this policy is that ‘build to rent’ developments, which are apartment blocks built with the backing of institutional investors and then rented out all for the same price and rental terms and conditions, are growing in number. According to the British Property Federation, there are nearly 100,000 built or with planning permission, with more than half of them in London. The government wants to see even more built, partly because they can be constructed quickly and require no government cash.