Recent data has revealed that it now takes longer to sell a house than a year ago prompting many landlords to make the most of their rental properties rather than sell up while the market is tricky.
PropTech platform RentalStep says the slowing market should dissuade landlords looking to make money or cut costs from selling up, instead finding alternative ways to reduce outgoings or generate better returns from their rental properties.
According to the latest Rightmove findings, the average time to sell a property across Britain as a whole has increased from 72 days a year ago to 77 days now – more evidence of a housing market which is slowing down. The portal describes time to sell as the duration between when a property first lists on Rightmove and when it is marked under offer or sold subject to contract by an estate agent.
Although there are significant regional variations – with homes selling at their quickest in Livingston, Scotland, where a home is typically snapped up in 35 days, and also flying off the market fast in the East and West Midlands – the general trend is for properties taking a longer time to sell.
Mike Georgeson, founder and chief executive of RentalStep, had this to say: “The data suggests that it’s currently more difficult, and is taking people longer, to sell a home. As a result, those landlords considering selling their properties to make money or cut costs might want to think again when market conditions are difficult.”
According to Georgeson, there are a number of reasons why the sales market is shaky – not least Brexit uncertainty, which is leading to buyers and sellers taking a wait-and-see approach until the terms of the final withdrawal deal have been outlined.
He continues: “The ongoing question marks over Brexit are weighing down the sales market. However, it’s affecting rentals less because the private rented sector is a far more urgent market. In other words, tenants still need to find or move homes – often at very short notice for work or family reasons – and are less likely to have the option to delay a move like buyers and sellers. This urgency is helping to keep rental demand high.”
What’s more, Georgeson says the considerably lower transaction costs at play with a tenancy compared to a sale, means a wait-and-see approach is much less necessary.
With tenant demand remaining high and much less likely to be put off by Brexit uncertainty and other variables, it could be beneficial for landlords to sit tight.
Georgeson adds: “It is likely rents will continue to grow steadily, despite dips here and there. And, over the long-term, the value of a landlord’s investment will continue to rise with house prices across most of the country still on a generally upward curve.”
To lower costs and squeeze the maximum out of their rental properties, Georgeson says landlords should consider alternative property management services.
“For those landlords eager to cut costs, the prospect of free referencing (including credit checks, landlord references and employer references) will certainly be of interest. In addition, free, online tenancy agreements – digitally signed and always available – can help to make the whole process smoother and more secure.”
Meanwhile, rental homes need to be filled with good, reliable tenants who regularly pay their rent on time to ensure income is regular.
Georgeson continues: “With our Tenant Find feature, landlords can source the ideal tenant for only £20. By using Rightmove, Zoopla, PrimeLocation and our own site to advertise your property to the largest possible market, we can increase the exposure your homes receive and increase the chances of occupying them with excellent tenants.”