I was recently reading a report by the Home website, which stated that hordes of landlords are selling their buy-to-let investments due to increasing burdens on them in the buy-to-let market. Their findings show that the number of new properties that came onto the market (for sale) nationally, jumped by 11% as a result.
The increasing burdens relate to new tax rules coming into effect over the next three to four years, as well as the announcement that all self-managing landlords (i.e. landlords that don’t use a letting agent to look after their buy-to-let property) will soon need to register with a compulsory redress scheme to resolve tenant arguments and disputes. This is because Westminster wants to heighten standards in the private-rented sector.
Interestingly, I was chatting to a self-managed landlord from Blackthorn who wasn’t aware of the additional legislations that have recently hit the private-rented sector, including the ‘Right to Rent’ regulations, which came into operation last year.
Landlords now have to certify that their tenants have the legal right to live in the UK. This includes checking and taking copies of their tenants’ passports or visas before the tenancy is signed. Of course, if you use a letting agent to manage your property, they will usually sort this for you (as they will with the redress scheme when that is implemented).
However, if you are a self-managed landlord, the consequence of not complying to this new regulation is severe. If you let a property to a tenant who is living in the UK illegally, you will be fined up to £3,000.
That same Blackthorn landlord popped into my offices recently and I checked all his paperwork to ensure he was on the right side of the law going forward. If you’re a landlord in the Bicester area and would like me to review your paperwork, free of charge, then please get in contact.
But what are all these extra properties being dumped onto the market in Bicester? When I looked at the number of properties on the market in Bicester now, as opposed to a year ago, the figures told an interesting story…
Overall, Bicester does match the national trend, with the number of properties on the market actually rising by 18% in the last year. It was particularly interesting to see the number of terraced properties increase by 34%, but the number of flats on the market drop by 16%.
After speaking to my team and other property professionals in the town, this movement in the number of properties and the types of properties on the market can’t simply be attributed to landlords putting their properties on the market. The entire property market has changed over the past 12 months, with the owner-occupier market being the key factor for the change in the number and type of properties for sale (a subject I will be focusing on in spring).
In each month over the last ten years, there has been a small number of Bicester landlords who have been releasing their monies from their Bicester buy-to-let properties – as is the nature of all investments! Nationally, the number of rental properties coming onto the market fell by 16% in Q4 2017 compared to Q4 2016, but that isn’t because there are 16% less rental properties to rent. This is down to the fact that tenants are staying in their rental properties for longer, meaning less are coming onto the market to be re-let.
Nevertheless, some Bicester landlords will still want to release the equity held in their buy-to-let properties in 2018. All I suggest is that you speak with your letting agent first, as putting a rental property on the open market often spooks tenants into handing in their notice days after you put it on the market (because they don’t like the uncertainty and believe that they will become homeless). This means that you could end up with an empty property and a loss of rental income.
However, it’s not all doom and gloom, some letting agents who specialise in portfolio management have access to select lists of landlords who will buy with sitting tenants in. If you have a portfolio in the Bicester area and are considering selling some or all of them – drop me a line as I may have a portfolio landlord for you (giving you the peace of mind that you won’t have any rental voids).