x
By using this website, you agree to our use of cookies to enhance your experience.

The private rental sector is home to all kinds of investors - from the major institutional players to the amateur' landlords who may have well fallen into letting out a property.

The beauty of the market is that there is a place for them all and the diversity of housing stock available across the country provides these very different animals with the opportunity to make an investment.

Lettings agents often find themselves dealing with various types of landlords' and therefore it makes perfect sense to tailor the service you offer to those participants.

Understanding exactly what type of landlord you are most likely to deal with and ensuring you cater for them perfectly can mean the difference between securing the management of their properties, or not.

It's quite plain to see however that private rental activity is no longer in its infancy, and even those who are very new to the market often want to progress, and progress quickly.

This ambition to want to generate higher-yielding activity or quickly add to portfolios is often very evident, and judging by the latest figures on housing stock yields, agents should perhaps prepare themselves for more landlords looking beyond, what we might call, the typical vanilla' residential property let.

Recent data from Mortgages for Business suggests that the rental yield on such vanilla' investments has been falling, whereas more complex property arrangements have seen a rise.

While gross yields on vanilla offerings dropped to 5.9% in Q3 from 6.3% in Q2, housing stock such as multi-unit freehold blocks have been offering up yields of 8.6%, a swift increase from the 7.3% seen in the second three months of this year.

Also the yields from HMOs (houses in multiple occupation) may have dipped slightly from 9.3% in Q2 to 8.9% in Q3 but they are still outperforming the vanilla' properties by a significant margin.

Therefore, agents perhaps should prepare themselves for an increase in interest from landlords in multiple occupation-type properties. Professional landlords are certainly going to be looking hard for those high-yielding properties which suggests that more complicated offerings will be highly sought after in the months and years ahead. It therefore makes perfect sense for agents to be tailoring both their sales business and their property management propositions to this increase in interest, and perhaps looking to secure relationships and introductions which will allow more of these types of properties onto their books.

There is further positive news for agents and it is the increasing appetite of lenders in the buy-to-let market which will facilitate purchase and remortgage activity. At the end of September, 707 separate buy-to-let products were available (up from 637 in June) and next month the sector will also be boosted by the introduction of a brand new lender, Fleet Mortgages, which will be offering buy-to-let mortgages through intermediaries for the first time.

Activity is therefore only likely to improve and, also with Government schemes like Rent-to-Buy kicking off soon, there is a continued focus on the ways in which the private rental sector can help bridge the housing gap'.

Quality agents are in a very strong position at present and, even with the regulatory and political focus on the sector, those who operate to the highest of standards and seek out the opportunities that so clearly exist, should find themselves able to secure significant levels of business in the years to come.

*Rob Clifford is Chief Executive of CENTURY 21 UK

Comments

MovePal MovePal MovePal