A New Year, a Nervous Market… but Reasons to be Cheerful!
The New Year is here! A time for reflection, an opportunity to plan, a moment for optimism… well usually at least…
It must be said that the enthusiasm for this New Year, from a market point of view, seems somewhat muted compared to normal. Landlords are weighing up the market circumstances in which they find themselves, with more than half an eye on the metaphorical horizon (and more to the point, what they fear might be coming over it).
2024 felt tough enough, but 2025 is being dressed up by many as looking to be even tougher – if the gloomy headlines we are seeing in the press are anything to go by.
Increased Stamp Duty, higher Buy to Let Mortgages, the pending Renters Rights Bill (which at the time of writing awaits its third reading in Parliament next week) …
I don’t know about you, but sometimes it feels as if landlords are an easy target.
Conversations with our Landlords
At Your Home Manged we are used to these sorts of conversations with our clients – honest landlords who do everything right, but who look at legislation changes, who see property prices stalling, who feel the weight of lost tax relief and higher tax thresholds, who hear that mortgage rates will rise before they fall…
Well, really, you can forgive those who think: what is the point? I may as well sell.
And some of you are. Our colleagues on the sales side of things do remark on the number of buy to let properties coming up for sale presently, and they do comment on the number of renters now looking to buy instead of continuing to rent, given rental prices – which have increased in London by 11.6% on average over the past year according to the Office for National Statistics.
The concerns of landlords are real, and we have no doubt that the forthcoming Renters Rights Bill will play a major part in shaping the landscape for the South London Lettings Market in 2025.
Nevertheless, these things are never entirely black and white. From our point of view as Agents, we still tend to look at this market and think: there are plenty of reasons to be cheerful!
Even when it comes to what many Landlords are dreading – the Renters Rights Bill – there are opportunities to be seen amongst the several hundred pages of draft bill (and of course, we wait to see what will make it from Draft Bill to Act of Parliament).
We are helping savvy Landlords to seize the moment and to stay ahead of legislation.
Opportunities in 2025
Just one section of this new lettings law is around tenants having a right to have pets in a property – with some provisos to prevent this, but only under certain, demonstrable circumstances.
On the face of it, many Landlords worry about this: what if the tenants’ pets ruin my property? What if the damage caused by pets causes more money than the deposit to put right? Et cetera.
Understandable concerns.
Nevertheless, what if I were to tell you that evidence points to pet-owning households costing landlords less money post-tenancy to put things right?
A study carried out by the University of Huddersfield found that, in spite of Landlords’ fears, “the average total cost of pet-related damage was £300 per tenancy, compared to £775 for non-pet-related damage caused by non-pet-owning tenants. Over the course 12 years, the total monetary benefits to landlords of letting to tenants with pets exceed any related costs. 76 percent of landlords reported they did not encounter any damage caused by dogs or cats in their rental properties.”
Couple this news with the fact that the new legislation is going to allow room for landlords once again to ask that tenants take out a specific pet insurance policy, and you may start to think: actually, as a Landlord, perhaps this is an opportunity to reduce the cost to myself that I might normally incur fixing problems in my property between tenancies?
Let’s stay on this pet-based theme.
We are a pet-loving nation. Around 51% of UK adults own a pet, and more than half of those are dogs. According to a YouGov survey in fact, up to 76% of tenants aspire to pet ownership – and yet, without this impending change to legislation, currently only 7% of rented properties advertise that they welcome pets.
Now – we are not for a moment telling you how to think. We are advising what the law will be (bar anything entirely unpredictable happening in the meantime), and we are suggesting, if you are a landlord who aspires to help people (which the vast, vast majority of landlords are), that it might make sense to get ahead of legislation in this area, to perhaps join the current 7% who advertise pets are welcome if you are not in the 7% already, and to then have your pick of up to 76% of a very eager market when choosing tenants?
Unless you have a true reason that pets are not allowed in your property, you will otherwise, in a few months’ time when your property becomes vacant again, have little choice in the matter, and you may then regret not taking that otherwise perfect tenant, in your eyes, who just happened to have a small dog, choosing instead the less-than pleasant, late to pay (but never too late) tenant that you ended up with, who is now in any case welcoming an untrained puppy that you can’t refuse to their home (and your asset).
This is just one example amongst many of areas where we see opportunities for landlords to really capitalise in 2025. By all means get in touch with us to discuss many more!
In a market where competition amongst tenants is still so fierce, where predictions from everyone from The Halifax to Rightmove to the boffins in the back room at Savills are that property prices will increase by 3-5% or more this year, and where rents – high as they are – are only increasing even as other landlords are choosing to sell their properties to first time buyers and get out of the game, there is every reason to feel positive as a property owning Landlord in South and South West London.
Stay tuned to our social media and to our regular blogs, as we navigate the 2025 market, keeping you up to date with market trends and legislation changes every step of the way.
