LANDLORD TIMES
Monthly news for landlords brought to you by:
September 2024
Base rate cut brings cheer to buy-to-let investors
Landlords have reason to cheer as the Bank of England looks set to cut interest rates further in the coming months.
A decision by the Bank’s monetary policy committee (MPC) to lower the rate in July by a quarter of a percent to 5% saw a flurry of activity by mortgage lenders to reduce their rates.
It was the first time there has been any downward movement in interest rates since March 2020.
For those buy-to-let investors who need to re-mortgage in the coming months, the news was positive and offered relief, not least after payments had risen substantially after the disastrous Liz Truss mini budget.
Announcing the cut, the Bank’s governor Andrew Bailey explained lower inflation had allowed for the reduction but warned people not to expect rates to return to the historic lows of 2008.
In a statement the MPC said: “Monetary policy will need to continue to remain restrictive for
sufficiently long until the risks to inflation returning sustainably to the 2% target in the medium term have dissipated further.”
Sheldon Bosley Knight’s associate director, Nik Kyriacou said: “This is a very positive step taken by the Bank of England and one which I believe will not be the last this year.
“It is the first cut since 2020 and makes borrowing cheaper which is good news for those landlords on variable deals.
“For those who are looking to re-mortgage, the situation is not as dire as it was two years ago as lenders are offering cheaper deals. For those looking to add to their portfolios, rates will be more
favourable so now is a great time to think about it.
“Property is still a great investment and I hope this announcement will encourage landlords to stick with it.”
Rental yields hit 10-year high
Rental yields have reached their highest level since 2014.
Research from Paragon’s latest PRS Trends Report shows landlords generated average rental yields of 6.3% in the second quarter of the year.
This figure has not been hit since the third quarter of 2014 and have not surpassed the current level since Q3 2012 when they reached 6.7%.
In the last year, they have climbed steadily from the 15-year low of 5.2% recorded in the first and second quarter of 2023.
Almost 800 landlords were surveyed for the report which also found a correlation between portfolio size and yields of 6.9% by landlords with portfolios of 11 properties or more.
Yields of 6.9% were also generated by buy-to-let investors who hold all their properties in limited company structures.
A similar divergence can be seen when data is split by property type, particularly houses in multiple occupation (HMOs), whose owners report yields of 7.2%.
It’s not only yields which have seen an uptick. Average UK private rents increased by 8.6% in the 12 months
to July 2024, unchanged from in the 12 months to June 2024.
The latest official figures from the government show an average increase to £1,319 per month in England with the West Midlands’ average at £884 per month.
London was the English region with the highest rents inflation, at 9.7%. This was unchanged from the 12 months to June and was below the record-high annual rise of 11.2% in March 2024.
invest carefully and strategically.
“However, although the rise in rents is not good news for tenants, many landlords have been forced to raise rents due to taxation changes by the previous governments. It is to be hoped the new Labour government will make good its promise to increase housing supply which would help.
“If any of our landlords would like advice or help in order to maximise their yields please do get in touch and we’d be happy to help.”
Sheldon Bosley Knight’s lettings manager Claire Paginton said: “For yields to be so high is great news for landlords. It is particularly encouraging for those who are considering their future in the market as it shows the potential of staying.
“While this figure is an average, it shows what can be achieved if you
Landlords keen to grow their portfolios
Strong long-term tenant demand is a primary driver for ambitious landlords looking to build their property portfolios.
A report from buy-to-let mortgage specialist, Paragon Bank, revealed those investors with up to three properties are keen to increase their portfolios.
The Next Generation Landlord Report, which surveyed 500 landlords, also found other key factors in expansion plans were an increasing population, a desire to supplement retirement income and rising house prices.
The findings are a welcome boost to the sector and show that despite concerns over legislative and tax changes, there is a growing trend of landlords actively seeking to increase their rental income and build long-term wealth.
The key findings from the report show six in 10 landlords (60%)
cited the on-going demand for rental properties as a key factor in their decision to grow their portfolios. Over half (54%) said they were looking to add properties as a means to supplement their retirement income.
Nearly half (47%) cited longterm house price growth and 34% said they prefer property as an investment asset over other options.
The report also sheds light on the factors influencing landlords' decisions to enter the rental market. Friends and family played a significant role, with 43% citing them as a primary motivation. Additionally, 39% started renting out their first property by accident, often after buying a second home or inheriting property.
When asked why they chose property over other investments, landlords cited its tangible nature (67%), wealth-building potential (54%), and the ability to pass it on as an inheritance (53%).
Sheldon Bosley Knight’s associate director Nik Kyriacou said: “This report is very good news and a welcome boost to the sector. This commitment they are showing will be hugely positive for the health of the sector and shows the confidence of landlords who have borne the brunt of legislative and tax changes which have seen many sell up.
“This shows there is still an appetite for growth and investment and I hope it inspires other landlords to stick with it and also think about the long-term.
“As has been cited here, property remains a very good investment opportunity. If any of our landlords would like advice on how they too can expand their portfolios, please do give one of our offices a call.”
The private rental sector faces a huge challenge in meeting the government’s newly proposed energy performance certificate (EPC) target.
Ed Miliband, energy security and net zero secretary, confirmed plans to make landlords upgrade their properties to C by 2030. If they do not they will be barred from renting them out.
In a statement to the Commons he said: “One thing this government will do that the last government did not, is demand landlords raise the standard of their accommodation to a proper EPC standard C by 2030.
“Ensuring warmer, healthier private rented homes will lift many families out of fuel poverty and reduce energy bills.”
However, calls are being made for landlords to receive the support and financial help needed to meet their obligations.
Research by Hamptons warns it could take landlords up to 18 years to meet the targets required and suggested support could include making energy improvement costs tax-deductible. Other ideas include offering grants or matching energy
Help landlords with their EPC obligations
home improvement spending pound for pound.
Its research suggests 39% of EPCs carried out on rental homes this year saw the property move into a higher band, up from 34% a decade ago. However, this rate still falls below the level of upgrades seen in the years leading up to 2018, when the requirement for rental homes to achieve an EPC rating of at least E was introduced.
To meet the 2030 target, approximately 340,000 rental homes will need to make improvements to achieve at least a C rating every year. This is a threefold increase on an annual basis from the 115,000 homes expected to make sufficient improvements in 2024.
Meera Chindooroy, National Residential Landlords’ Association deputy director of campaigns, policy and public affairs, said: “Creating energy efficient homes is a win/win – tenants have cheaper bills, and the property is more marketable as a result.
“However, the costs to get some homes, typically older properties, to a C grade is, quite simply prohibitive
for smaller landlords.
“Our research shows, contrary to popular opinion most landlords are not property tycoons with money to spare, and with improvements potentially costing tens of thousands of pounds it is essential the government comes up with a plan that will work across the country.”
Sheldon Bosley Knight’s lettings director, Rebecca Dean said: “We agree with others calling for financial help for landlords so they can meet their EPC obligations.
“Our worry is if this is not forthcoming, many will simply not be able to afford the necessary upgrades and sell up.
“This will have a devastating impact not only on the sector in general but their tenants in particular. There is already a serious shortage of available rental properties and this could make the situation even more dire.
“If any of our landlords wish to speak to us about how they can meet their obligations or need advice on accessing financial support, please give us a call as we’d be happy to help.”
Rent controls don’t work
Rent controls would have a detrimental impact on the private rented sector were they to be adopted.
A review of schemes across the world from the Institute of Economic Affairs (IEA) shows landlords could leave the sector, thus making the housing shortage worse.
The study comes as calls to introduce rent controls in the UK have mounted in response to the housing crisis. A Labourcommissioned report, London Mayor Sadiq Khan and the Green Party backed the idea. Scotland also had a rent increase cap until March 2024.
A briefing paper by Dr Konstantin Kholodilin, senior researcher at the German Institute for Economic Research, examined 196 studies undertaken over 60 years across almost 100 countries.
The report found rent controls can lead to a reduction in spending on maintenance, poorer quality housing, fewer rental properties being built and a reduction in residential mobility.
According to Dr Kholodilin, rent controls can also create excess demand for housing. This can result in new residents struggling to find places to live, which decreases labour mobility, increases discrimination against marginalised groups, and boosts black-market activity.
In a separate study, a third of private sector landlords said they would sell their investment properties if rent controls were introduced.
Research compiled by research consultancy Pegasus Insight found 33% of landlords said implementation would lead them to sell some, or all, of their rental properties.
The National Residential Landlords Association (NRLA) said rent controls would be “a disaster for tenants”.
Its chief executive Ben Beadle said: “All [rent controls] would do is choke off supply further, undermining what little choice tenants currently have when looking for somewhere to live.”
Sheldon Bosley Knight’s lettings manager Josh Jones agreed and said: “Although it is understandable why some argue for rent controls and caps when rents are rising so much, what would be far better for tenants is for more housing to be made available in the sector.
“At Sheldon Bosley Knight, we fundamentally oppose rent controls for the reasons above, but until the powers that be increase the amount of homes available, rents will continue to climb and calls will continue for curbs to be put in place.
“We will continue to lobby against any moves to impose this.”
“At
Sheldon Bosley Knight, we fundamentally oppose rent controls for the reasons above, but until the powers that be increase the amount of homes available, rents will continue to climb and calls will continue for curbs to be put in place.”
Managing properties is a full time job
Over half of landlords see the management of their properties as a full-time job.
Only 19% said they relied on a property management company, with a quarter using a lettings agent.
A survey from buy-to-let lender Landbay found among those who regarded property as a full time role, most owned small portfolios of between four to 10 properties. This was followed by 34% who owned more than 20 properties. Only 18% owned between 11 and 20 properties.
Landlords who managed their own properties also spent the biggest
proportion of their rental income on property management.
This was despite nearly half of all those surveyed paying the same or less through a letting agent or property management company.
Costs associated with property management accounted for 13% of rental income for 15% of landlords.
A limited company was the preferred set-up for two thirds of those landlords surveyed.
Sheldon Bosley Knight’s property manager James Taylor said:
“Although some buy-to-let investors think doing without a managing agent is a saving, in reality it can be anything but.
“It is a stressful job particularly if you have a 9 to 5 as well. There are so many things which can crop up such as maintenance issues, non payment of rent, tenant deposits, ensuring the property is safe and secure and ensuring all the legal aspects are taken care of.
“For this reason we urge any landlord or potential landlord to seriously consider using a managing agent. It takes all the stress out of it and allows you to get on with your day-to-day.
“If you would like to find out more please do give one of our offices a call and we’d be happy to help.”
Free forum for Warwickshire landlords
Landlords in south Warwickshire are being encouraged to take part in a focused industry event.
Organised by Warwick and Stratfordupon-Avon district councils and the Landlord Steering Group (LSG), it takes place on Tuesday, October 22 at Stratford racecourse.
The Landlord Forum follows the success of the one held in May at
the SYDNI Centre in Leamington and will feature exhibitions from local specialist companies which help landlords and agents involved in property management.
Delegates will be able to network with other professionals and industry experts, get help and advice and listen to a series of bite-size talks and presentations covering a range
of topics including recent policy and legislation changes.
Registration is free and doors will open at 12.30.
Visit Select tickets – Landlord Forum – Stratford-upon-Avon Racecourse, Luddington Road, Warwickshire (tickettailor.com) to book tickets.
Haven Lodge, Clay Lane, Coventry
• Development of 35 studio apartments • Modern fitted kitchenettes and bathrooms
• Highly sought-after location • Allocated parking spaces
• Current rent value of £269,285.10 pa
• Tenants in situ
• EPC - B
Gross yield of 8% £3,250,000
Cavalier Court, Siddeley Avenue Coventry, CV3 1BP
To follow Sheldon Bosley Knight click here
Cavalier Court, Siddeley Avenue Coventry, CV3 1BP
A fantastic opportunity to acquire this two bedroom first floor apartment situated in the popular residential location of New Stoke Village. The property is perfect for a first time buyer or investor with a potential rental yield of 9.7% and is offered with no onward chain.
The accommodation on offer comprises generous lounge, fitted kitchen with oven and electric hob, two spacious bedrooms and bathroom
Further benefits include an allocated parking space, well maintained communal gardens and double glazing throughout.
A fantastic opportunity to acquire this two bedroom first floor apartment situated in the popular residential location of New Stoke Village. The property is perfect for a first time buyer or investor with a potential rental yield of 9.7% and is offered with no onward chain.
Siddeley Avenue, Coventry,
• Two-bedroom first floor apartment
• No onward chain
• EPC - C Siddeley Avenue, Coventry
• Highly sought-after location
• Allocated parking space
Cavalier Court, Siddeley Avenue, CV3 1BP
The accommodation on offer comprises generous lounge, fitted kitchen with oven and electric hob, two spacious bedrooms and bathroom
Further benefits include an allocated parking space, well maintained communal gardens and double glazing throughout.
• Current rent value of £850 pcm
Gross yield of 11.3% £90,000
2 1 1 C
• No upward chain
• Conveniently located close to town centre
Coach House Court, Loughborough Gross yield of 7.2% £150,000
• Two-bedroom second floor apartment
• Single parking space with barrier access
• Potential rent value of £900 pcm
• Communial grounds
• EPC - B
values and subsequent yields are only estimates unless tenanted, and subject to market fluctuations.
Quay, Stratford-upon-Avon
• Two-bedroom retirement apartment
• Refurbished throughout
• Highly sought-after town centre location
• Vacant possession
• Potential rent value of £950 pcm
• Minimum age of 60
• EPC - C
Drive, Banbury
• Two bedroom, second floor apartment
• No upward chain
• Allocated parking space
• Easy reach of mainline rail to London Marylebone
£160,000
• Current rental value of £950 pcm
• Tenants in situ.
• EPC - C
Gross yield of 6.5% £175,000
Bridgefoot
Rosemary
A great opportunity to acquire this two bedroom end terraced property located in the popular residential location of Stoke. The property is perfect for a first time buyer, family or investor and is offered for sale with
The accommodation on offer comprises entrance hallway with stairs rising to the first floor, lounge with bay window which is currently used as a bedroom, spacious dining room, fitted kitchen, family bathroom with bath
Further benefits include a low maintenance rear garden, gas central
Lowther Street, Coventry, CV2 4GP
Lowther Street, Stoke, Coventry
£180,000
• End of terrace family home
• Spacious lounge/diner
• Perfect for a first time buyer or investor
• No onward chain
Lowther Street, Coventry, 2 1 2 C
• Current rent value of £850 pcm
• EPC - C
• Two-bedroom, first floor apartment
• No upward chain
• Potential rental value of £900-£950 pcm
• Allocated parking space.
• EPC - B Brookfield Court, Alcester Road Gross yield of 6.3% £180,000
• Walking distance to the town centre
• Allocated parking space
*All rental values and subsequent yields are only estimates unless tenanted, and subject to market fluctuations.
The Hawthorn apartments
Sheldon Bosley Knight is delighted to offer an off market, exclusive opportunity of either individual plots or multiple unit discounted packages from developer Taylor Wimpey.
The Hawthorn apartments
Ranging from one-bed apartments at 525 sqft to executive five bed detached houses at 1,986 sqft, there is plenty of selection to suit your investment needs.
> Locations include Hatton, Warwick, Gaydon, Nuneaton and Kersley
> House types range from two-bedroom semi – detached, three-bedroom detached, four-bedroom detached and executive five-bedroom detached houses.
> Three blocks of apartments including one-bedroom apartments at 525 sqft and two-bedroom apartments at 750sqft.
> House styles include the Gosford, the Byford, the Beauford, the Rossdale and the Lavenham.
> Multiple unit discounted packages available.
> Whole blocks available as single purchase.
> Potential for great yields.
*Discounts and
For more information please contact Nik Kyriacou and the New Homes Team on 01789 333 466
• Perfect for a first-time buyer or investor
• Two double bedrooms
• Highly sought-after location
• Current rent value of £895 pcm
• Utility room
• EPC - D
• Front and rear gardens with a workshop
• A charming and characterful terraced home
• Excellent central location
• Current rent value of £825 pcm
• No onward chain
• Perfect for a first-time buyer or investor
• EPC - D The Old Stables, High Street, Pershore
• Kitchen with built in/fitted appliances
location of Stoke. the property is positioned close to University and Coventry City Centre, is perfect for a first family or investor and is offered with no onward chain.
accommodation on offer briefly comprises dining four with bay window, spacious lounge, beautiful kitchen including new appliances and family featuring bath with over shower. To the first floor are two bedrooms and a generous single bedroom.
include gas central heading with a new boiler, throughout, new electrics and a well presented and landscaped rear garden.
*INVESTMENT OPPORTUNITY*
Road, Coventry, CV3 1AP
A great investment opportunity for a current or aspiring Landlord within walking distance to Coventry City Centre. This traditional three bedroom property with four lettable rooms is situated in the convenient location of Stoke and has a current payable rent of £9,900 per annum with an increase once fully let.
• Three generous bedrooms
• No onward chain
A great investment opportunity for a current or aspiring Landlord within walking distance to Coventry City Centre. This traditional three bedroom property with four lettable rooms is situated in the convenient location of Stoke and has a current payable rent of £9,900 per annum with an increase once fully let.
Bolingbroke Road, Coventry Gross
• Close to Coventry University and Coventry city centre
Bolingbroke Road is located in Stoke and is situated within walking distance to Coventry University and Coventry City Centre making it convenient for professionals and students alike. A variety of local amenities are situated a short walk away for ease and the property is also positioned on a bus route.
• Recently renovated throughout
The ground floor accommodation on offer comprises entrance hallway, double bedroom, communal lounge with stairs rising to the first floor, fitted kitchen and shower room. To the first floor are two double bedrooms rooms, a shower room and a further bedroom featuring en-suite shower
• Current rental value of £1,100 pcm
• Contemporary ground floor bathroom
• EPC - C
Great road links such as the A444 and M6 are also only a short drive away.
Further benefits include a rear garden, double glazing throughout and gas
The ground floor accommodation on offer comprises entrance hallway, double bedroom, communal lounge with stairs rising to the first floor, fitted kitchen and shower room. To the first floor are two double bedrooms rooms, a shower room and a further bedroom featuring en-suite shower
Further benefits include a rear garden, double glazing throughout and gas central heating with a new boiler installed in March 2023.
4 3 1 D
• Perfect for an investor
• Four lettable rooms
• HMO Licence
• EPC - D Harley Street, Coventry Gross yield of 8.7% £225,000
• Close to university and town centre
• Current payable rent of £19,740 pa
• Communal lounge
A fantastic opportunity to acquire this three bedroom end-terraced property positioned within walking distance to University Hospital. The property is perfect for a first time buyer, family or investor and is offered
The ground floor accommodation on offer comprises vestibule, hallway with stairs rising to the first floor, spacious lounge/diner, fitted kitchen and integral garage. To the first floor is a generous family bathroom with bath and over shower, two double bedrooms and a single bedroom all
Externally the property boasts front and rear gardens, parking space at
Further benefits include gas central heating and double glazing
Farber Road, Coventry, CV2 2BH
Farber Road, Coventry, CV2
Farber Road, Walsgrave, Coventry
• End of terrace three-bedroom property
• Walking distance to university hospital
• Garage
• No onward chain
3 1 1 D
• Current rental value of £1,350 pcm
• EPC - D
£230,000
• Central location with access to mainline railway station and town centre
• No upward chain
• EPC - C Jordan Close, Market Harborough
• Potential rent value of £950 pcm
• Two first floor bedrooms
• Single attached garage
*All rental values and subsequent yields are only estimates unless tenanted, and subject to market fluctuations.
Gross yield of 4.8% £235,000
• No upward chain
• Close to village centre
• Two bedrooms and family bathoom
• Car standing for two vehicles
• Potential rent value of £925 pcm
• Enclosed rear garden
• EPC - C
• Close to the town centre and all local amenities
• Three bedrooms, shower cubicle in master bedroom
• Lounge and separate dining area
• Enclosed rear garden
Gross yield of
£240,000
• Potential rent value of £995 pcm
• No upward chain
• EPC - D
Gross yield of 4.7% £250,000
Aspen Close, Great Glen
Heygate Street, Market Harborough
Kings Road, Evesham
• Three-bedroom terrace property
• No upward chain
• Family bathoom
• Spacious garage/storage
• Potential rental value of £1,250 pcm
• Utility room and WC
• EPC - E
Montfort Street, Evesham
• Four bedroom property
• No upward chain
• En-suit shower room to primary bedroom
• Kitchen/Diner
Gross yield of 5.8% £255,000
• Potential rental value of £1,395 pcm
• Rear garden.
• EPC - D
Gross yield of 5.8% £285,000
Pevensey Road, Loughborough
• HMO licence, recently used as student let
• Close to university and town centre
• No upward chain
• Four spacious bedrooms
• Potential rental value of £1,800 pcm
• Diner/kitchen with appliances
• Gas central heating
• EPC - C
Harcourt Estate, Harborough Road
• Three-bedroom property
• Village location
• Breakfast kitchen with built in appliances
• Modern bathroom suite
and
£290,000
• Potential rental value of £1,300 pcm
• Car standing.
• EPC - D
Gross yield of 4.2% £365,000
Street, Stratford-Upon-Avon, CV37 6JF
• Prominent high street location
• Investment opportunity
• Gross Internal Area: 434m (46,802 sqft2)
• Passing Rental Value: £47,000 per annum
• Leased to a national covenant
• Prominent high street location
• Potential for future development (STP)
• Prominent for passing traffic
• 20 parking spaces
• Development potenial (STP)
• Stratford town centre
• Freehold
• EPC - D
• Passing rent of £74,000 per annum
• Three-storey commercial property
• 793.94m (8,546 sqft2)
• EPC - TBC
Worcestershire
West Midlands
Leicestershire
