Lettings Market: The Hunt For Yields.

Letting agents take note – profits from slicing single houses into multiple flats (known in the industry as houses in multiple occupation or ‘HMOs’) are falling, meaning that this business model is no longer the biggest earner in the buy to let business.
This may have particular significance come May, as the property market expects an influx of landlords looking to invest their pension holdings in the property market.
If you aren’t aware of the upcoming changes to the pensions market click here to find out more.
Although HMOs do still command a decent return (calculated at 9%), profits are falling and they were pipped to the post on the profit league table by landlords buying single blocks of flats or converting buildings or warehouses into apartments.
This investment on a larger scale generated a greater gross profit between October and December 2014, according to figures released by buy-to-let mortgage broker, Mortgages for Business.
The property market may still be buoyant but it is slowing down, especially with the election coming, so those planning to use their savings need to be savvy. Which is where the story gets interesting for letting agents.
Those smaller scale landlords who are still sure that they don’t want the safety that comes with the smaller returns of a fixed savings account and are happy to throw their hat into the property ring, will now be seeking even more guidance and ‘inside information’ from their trusted agent.
Traditionally, smaller scale investors tend to favour investment properties near their own homes as they feel it’s easier to manage something close by. But with the guarantee of rising profit no longer as safe as houses, they’re going to need to look further afield; and may only feel comfortable doing so if they know that there’s a decent agent in the area can ensure their property is managed well.
Potential buy to let landlords should be considering areas within commuter belts, with good transport links that will appeal to young couples, who can’t afford to live where they work.
Securing a property near good schools is always a safe bet, as ambitious parents are likely to pay above the going rental rate if it means they’re in the catchment area for a favoured state primary or secondary. Or they may look to capitalise on the student market.
Either way, all of these strategies adhere to the old property adage: location, location, location. Those savvy savers who are putting that first when it comes to their property search should be poised for the plucking by effective, forward thinking letting agents who proactively market themselves to this new breed of buy to let investors.
By communicating with them effectively (see more here) the right estate agent could be there for their client from the start of their house hunting process right through to the management of their property.
It doesn’t matter whether you fall to the right or the left of the political spectrum – when it comes to election time, that’s the winning strategy.

Alex Evans

You May Also Enjoy

Breaking News

Booming UK property market demand from Trump’s US

Commenting on how the UK property market is now experiencing a boom in demand from Trump’s US as well as the East, Daniel Austin, CEO and co-founder at ASK Partners, said: “The UK property market is experiencing a surge in demand from US buyers, driven by Donald Trump’s return to the White House, a stronger dollar,…
Read More
Love or Hate Rightmove
Breaking News

Rightmove’s weekly mortgage tracker 24/01/25

Average rates for 2-year and 5-year fixed-rate mortgages Term Average rate Weekly change Yearly change 2-year fixed 5.02% +0.02% +0.05% 5-year fixed 4.80% +0.03% +0.13% Term Lowest rate Weekly change Yearly change 2-year fixed 4.22% +0.00% +0.14% 5-year fixed 4.07% +0.00% +0.19% Average fixed-term mortgage rates for home-buyers with 5-10% deposits Loan to Value (LTV)…
Read More
Marketing

10 Social Media Strategies Every Real Estate Business Should Know

Social media has become a dominant force in shaping how businesses interact with their audience. A real estate business, where connections and trust matter immensely, stands to gain significantly by leveraging social platforms effectively. The “breakdown of hours in your life by task social media” reveals just how integral these platforms have become, not only…
Read More
Breaking News

Nationwide Housing Affordability Report

Affordability stretched, but gradually improving Modest improvement over past year, but affordability remains stretched by historic standards Considerable variation in affordability across occupational groups Affordability most stretched in London and South of England, with North of England & Scotland the most affordable Commenting on the figures, Andrew Harvey, Senior Economist, said: “There has been a…
Read More
Estate Agent Talk

Will the ‘Our Future Homes’ report address the needs of an ageing population?

Will the ‘Our Future Homes’ report address the needs of an ageing population? By Kevin Shaw at Leaders The government recently published an independent report, ‘Our Future Homes’, which considers our ageing population and looks at how housebuilders can meet the wants and needs of older people. It is widely acknowledged that not enough new homes…
Read More
Breaking News

Zoopla: Over a quarter of parents ‘lie or break rules’ to get children into their preferred school

Admission Impossible: Over a quarter of parents admit to ‘lying or bending’ rules to get their children into preferred schools Over a quarter (27 per cent) of UK parents admit to flouting the rules to get their children into schools, rising to 38 per cent in London The number who admit lying is on the…
Read More