We are all used to using Satnav to get us from A to B, however, navigating the UK housing market has never been a straightforward affair, with recent shifts adding a layer of complexity that landlords, especially those with a limited number of properties, are struggling to manage. A movement catching the attention of property experts is the growing number of buy-to-let landlords putting up their investment properties for sale with tenants still in place. Does this signal a crisis point for property investors?
Fresh statistics provide a clearer image. Currently, 12,518 properties are listed for sale with tenants occupying them. Here’s a brief regional rundown:
North West: Tops the chart with 20% (2,545 properties)
South East: Not far behind with 17% (2,188 properties)
Yorkshire & Humber: Represents 13%
East of England: Holds 12%
East Midlands and West Midlands: Both pegged at 11%
While we have always had trends, remember those bell bottom jeans and pump-up trainers? Is this just another one? Or is this housing trend here to stay? Chris Hodgkinson, the Managing Director of House Buyer Bureau, who was instrumental in this recent research, sheds some light on the subject. “Landlords often get a lot of stick. Tenants see the price of rent going up and often assume it’s the result of landlord greed, but this simply isn’t the case. Certainly not anymore.”
Indeed, for many landlords, especially those with only a couple of properties, managing them has become progressively demanding. Increasing mortgage costs are one of the main reasons landlords are struggling to meet these challenges. Chris explains “Some are trying to combat this by passing the cost onto their tenants, others are simply selling-up and getting out of the game. That’s how bad it’s become.”
It seems landlords are caught between a rock and a hard place; do we transfer these rising costs to our tenants, potentially placing them in financial difficulty? Or do we make the painful decision to exit the rental market altogether? It seems landlords may be jumping ship sooner rather than later, as Chris says, “Thousands aren’t even waiting until their existing tenants come to the end of their agreement. And while these tenants are legally entitled to stay put until the end of their tenancy agreement, they are effectively being sold as part of the house and their mid-long-term fate is to be decided by whosoever buys the property.”
As a landlord, this decision is far from easy. We're conscious that our choices could lead to eviction or higher rents for our tenants from the property’s new owner. We understand this puts pressure on an already stressful situation that many tenants are facing. Given the current economic unpredictability, it appears that the situation for buy-to-let properties might become even more challenging. Indicating a potential reduction in rental options for tenants and an influx of properties in the sales market.
So, what’s the takeaway for landlords and potential investors in the UK? Well, for landlords, while selling might seem the only viable option now, it’s essential to weigh the pros and cons, keeping long-term market fluctuations in mind. Additionally, open communication with tenants can alleviate some of the stress and uncertainty for both parties during these transitions.
Throughout all these shifts and turns, it's clear that the UK housing market, perhaps as it always has been, is in a state of flux. For investors, this could be an excellent opportunity to consider your investment options, especially if you're prepared for long-term financial commitments. With so many properties for sale, prices will go down in what is essentially a buyer’s market.
Whichever way you decide to go, with open dialogue and a proactive approach, both landlords and tenants can navigate these uncertain waters with clarity and confidence. Until next time, keep your investment compass steady and your dreams of property prosperity alive!
The Anonymous Investor.