Gazing into a crystal ball for inspiration is probably not the best way to plan your business, but based on 2016, it is probably going to be as accurate as any other informed prediction when looking ahead to the new year.
That being said here’s UKALA’s five predictions for lettings in 2017:
(1) Rents will rise, but probably not as fast as many commentators are predicting.
The various changes to the way in which landlords are taxed, and the proposals to ban fees to tenants will undoubtedly see increased costs passed on to tenants. However, the expectation that rents will increase by inflation busting percentages may be a little overblown.
It is likely that investment levels will remain somewhat subdued, but there still seems an appetite for new acquisitions.
Recent research conducted by the NLA suggests that tenant demand is starting to slow, particularly in London, which has been the engine room for rental inflation over recent years.
(2) Red tape will cause more and more problems for landlords and agents.
This is almost inevitable given the number of tweaks to the PRS in every country of the UK. But the big issue could be tenancies now coming to an end which began post-October 2015 when the requirement to supply prescribed information to tenants at the beginning of their tenancy.
2017 could well be the year of the s21 notice rejected on the basis that no-one can remember if the ‘How to Rent Guide’ was provided.
(3) The argument over tenant fees will rumble on for months.
This has only just begun. We have months, and months of debate over what is a fee, what is a charge and when does a holding deposit become security. I look forward to hearing the words:
…….As a condition of the grant, renewal or continuance of a tenancy……
over and over and over again.
(4) Value will be the watch-word for agents.
As landlords costs go up, so will their desire to preserve their margin. And in many cases this will mean a march towards self-management.
The onus is on good agents to demonstrate exactly how much value they provide, and the pitfalls of getting it wrong when you go alone.
(5) Landlords will change.
Some things never change, and many would argue that landlords fall into this category. However, the Government’s blinkered drive for ‘professionalism’ and ‘level playing-fields’ will see landlords looking at their businesses in a different light.
Making tax digital, the growing divide between Corporation and Income Tax, the swathes of new administration and the emphasis on building to rent will see the development of an enlarged professional class of landlords and savvy investors.
Long-term plans will be (even more) essential. As will high quality management and customer service.