Rental Markets – Due to the effects of the recession, even the smallest of changes to the property and private rental markets can have a huge effect on landlords, and unfortunately it looks like things are set to change very soon. 2014 has already seen both markets starting to re-gain momentum, however not everyone is as pleased about this as others. Here, we look at some predictions for the property and private rental markets which could affect your business in the near future:
The Bank of England will increase Interest Rates
It’s the news that everyone has been dreading, as since the recession hit the Bank of England lowered its interest rate to a record 0.5 per cent. Their plan was to help the economy during the tough economic time, and this plan worked as many people saved thousands of pounds per year on their mortgages, enabling many to avoid defaulting on their monthly payments. However, at the beginning of this year many people started to brace themselves for the news that the Bank of England would soon increase their interest rates due to the economy improving and unemployment figures decreasing.
However, in a pleasantly surprising announcement the Bank stated that they have no such plans for the near future as the economy is still fragile. This doesn’t mean that the rate will stay this low forever though, so wise landlords should start to prepare their budgets now in order to prepare for their outgoings increasing within the next year.
The Property Market will…
This is a very hard one to predict, as at the moment no one is entirely sure what is going to happen to the property and private rental markets over the next year. Right now, house prices are increasing at an astounding rate as the result of a recent influx in demand. During the recession many people struggled to afford to buy a property, however it seems that as the economy is now improving people are starting to move away from renting properties and towards buying them.
For landlords, this means that you could soon see a drop in demand for your properties, meaning that you will need to spend more time and effort marketing them. The good news is that the value of your property portfolio will increase, however beware: some industry experts are claiming that we could soon see another housing bubble, meaning that you need to be extremely careful if you are planning on investing in new property anytime soon.
Private Rental Property standards will improve
Regardless of what happens to the property and private rental markets over the next few months, it is extremely likely that the standard of private rental properties will improve. This is due to that fact that many local councils are bringing in harsher regulations for landlords in order to weed out the rogues and give tenants more control over their homes. Even though more people are starting to buy property, a large percentage of the UK population will continue to rent for a substantial period of time, meaning that they need to be protected.
We have already seen some local councils bring in mandatory registration for landlords, such as in Newham which was the first council in the country. Other councils are now swiftly following suit, as by making it mandatory for landlords to join a register in order to let property, councils can keep a keener eye on what is going on in their constituencies. One of the main reasons that councils previously struggled to tackle rogue landlords was because they didn’t have a comprehensive list of all the people in the area who were letting properties, however landlord registration will solve this issue. To find out more about your council’s plans for the private rental sector in the future it is advisable to get in touch with them as soon as possible, enabling you to prepare your business in advance.
As a landlord, it is always important for you to keep up with industry changes in order to protect your business and not fall foul of any new regulations that are put into place. The next twelve months will be extremely precarious for most landlords, so make sure your finances and landlord insurance are in order and always have a back-up plan should the worst happen.