Seeking new landlords? Look at both ends of the spectrum.

You’ll all be familiar with the phrase ‘generation rent’ but a new report from economists at accountancy firm PwC suggests that the rental market is set to thrive and actually grow over the next 25 years. The research even goes as far as suggesting that over half of under 40s will be living in properties owned by private landlords by 2025.

Increased tenant demand goes hand-in-hand with the search for new landlords and here’s where some lateral thinking and creative marketing might win you new business. The Guardian was quick to publish a post-Budget article about the rise of the ‘amateur’ landlord who, despite changes to mortgage interest tax relief, sees the buy-to-let market as a smart savings strategy for the future.

Of no surprise was the article’s advice to over 55s, who now have access to lump sums of cash via pension pots. The more mature investor is a great client. Disillusioned by poorly performing pensions, disheartened by historically-low rates interest rates on savings and even faced with the prospecting of working beyond 65 to maintain a regular income, the ‘silver’ landlord is open to ideas and willing to take up a full property management option so they can actually enjoy their retirement.

The Guardian article also touched on a more radical, leftfield landlord that, naturally, many agents overlook or don’t recognise altogether – the first-time buyer. Not a first time landlord, but a novice whose maiden property purchase isn’t a home to live in themselves but one to rent out. The illustration came in the form of a 20-something Londoner priced out of his own local market and resigned to living with his parents. Instead of buying for himself, he managed to use his sacred deposit to purchase an investment property in Nottingham, where house prices are much lower.

Although getting a buy-to-let mortgage as a non-homeowner was more challenging, it was possible and the new landlord now rents to students in a city with strong tenant demand (he still lives with Mum and Dad). The young landlord is enjoying some slim profits on the yield but, more crucially, is providing himself with a long-term saving strategy with an eye on using future price appreciation and accumulated profits to fund a purchase for himself in London.

There is an opportunity for agents to work with ‘generation rent’ to help them get on the property ladder in more ways than one. You may have heard Peter Knight of The Property Academy tell agents that a client can be a tenant, a landlord, a buyer and a seller all at the same time, and it’s true in this case. There’s a little ‘poacher turned gamekeeper’ about the thwarted first-time buyer whose plan to escape the rental trap is to become a landlord but the property market is metamorphosising right in front of our eyes. The solutions agents offer have to be just as flexible, creative and changeable. Is now the time to tell the first timer whose budget falls a little short in one area that they may be able to become a landlord in another?

* Simon Duce is the Managing Director of ARPM Outsourced Lettings Support

ARPM

Simon Duce is the Founder and Managing Director of ARPM Outsourced Lettings Support - a business designed to help small and start-up letting agents/property managers offer a full suite of property management and tenancy administration services through outsourcing.

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