A PropTech firm says buy to let investors should not respond to the slowing market by selling up, but should instead cut their costs or generate better returns.
According to Rightmove 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 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” says Mike Georgeson, founder and chief executive of RentalStep.
He believes 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.
But he says the issue is hurting lettings far less than sales. “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 is helping to keep rental demand high.”
He therefore urges landlords to sit tight because a stronger market will return.
“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 such as his.
“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.”