IT IS widely believed that the sales market slows over the summer months whilst people are busy with other pursuits.
The lettings market, however, enjoys a boost at this time of year so if you’ve previously pondered a second income through becoming a part-time landlord, now might be the time to give it some further thought.
Indeed, recent research by the National Landlord’s Association highlighted that the number of people supplementing their salaries with rental income has reached record levels with 70 per cent of all landlords being part-time ones, with 20 per cent of these planning to increase their property portfolio by the end of the year.
Additionally, reported just last week that the number of products on the market specifically to service the growing interest in buy-to-let (BTL) mortgages has risen to highs not seen since 2008.
There are a number of reasons that can explain this buoyancy in the lettings market.
Simply, as house prices start to rise, more and more people are looking to rent for longer whilst they continue to save for their own house purchases and this demand means that properties are being let quickly - good news for landlords keen to avoid periods of non-occupancy.
From a mortgage perspective, BTL products are viewed favourably by purchasers as they fall outside of the new affordability criteria introduced earlier this year.
These criteria, which assess the applicants’ ability to afford mortgage repayments alongside other outgoings, are believed to be responsible for slowing the mainstream market down in some areas.
Changes to pension legislation, meanwhile, are also likely to add to further growth in part-time landlords as retirees consider a rental investment to supplement their income instead of purchasing an annuity.
The good news for budding landlords in Stroud is that these factors, coupled with the local market conditions, make now an ideal time to consider a move in to property investment.
Our team here is continuing to see that there are simply more tenants than there is available housing, and all rental properties are being let quickly.
Indeed, properties in the new canal-side developments often get snapped up by tenants on first viewing.
There is a particularly high demand for the Old Stroud area although all areas remain popular and with the town boasting a number of great schools, properties in the catchment areas for these are especially attractive and therefore a wise location for investment.
We’ve seen that investors are particular keen on modern two bedroom properties in areas such as Uplands, Dudbridge and Stonehouse which can be bought for between £140,000 and £165,000 and let for up to £700pcm.
Ex local authority properties also continue to let very quickly as they tend to provide more space than modern properties in the same price bracket.
New developments that allow landlords to move tenants in with little or no preparatory maintenance work, and which offer National House Building Council (NHBC) warranties, can also be a wise move for the first-time landlord.
However, simply because the rental market is enjoying a period of buoyancy doesn’t mean it is advisable to jump straight in without carry out research and due diligence.
If you’re considering becoming a part-time landlord or already have a property that you’d like to let through Andrews, sign up for our quarterly landlord’s newsletter which contains guides on up to date market conditions, legislative changes, and tips on increasing yield whilst minimising risk: