What Does the Housing Market Look Like for Landlords?

Housing Market Look Like for Landlords: Recent research from Rightmove suggests that house price in Britain will peak in June, and start to wane over the following months as interest rate hikes begin to apply the brakes. This comes along with the pressure on buyers coming from inflation and the general rise in the cost of living.

According to the website, June saw a rise of 0.3%, which represented a relative slowing down. It also points to a lack of capacity amongst conveyancers, which could see prospective sales take up to six months to go through to completion.

All of this has particular implications for landlords – especially those who are buying to let. At the start of the year, polling conducted by Simply Business found that a fifth of landlords were planning to trim down their portfolio to compensate for the income they lost during the pandemic.

In 2021, landlords were able to benefit considerably from the stamp duty hliday, though they still neede to pay the 3% surcharge on second home purchases. Unless the situation with Covid-19 changes dramatically in the immediate future, it seems vanishingly unlikely that the government would seek to reintroduce these measures. 

What might happen, however, is for energy-efficiency regulations to be tightened. It’s estimated that areound two thirds of rental homes have an energy rating of D or below. If you’ve invested in property of this kind, then you might find that you need to spend money to bring them up to scratch. 

Why do interest rates matter?

Interest rates are arguably the most significant determiner of house prices. When interest rates are low, it becomes easier for prospective buyers to borrow money. You might be able to afford repayments on a more expensive property. Thus, a hike in interest rates might dissuade you from buying.

What about rent

The good news for landlords is that average rental prices are set to continue rishing across the country. The average rent is now at just over a thousand pounds per month. This figure is much higher in built-up city centres, where there’s huge demand for housing.

What should landlords do?

If you’re looking to get the best from your investment, then you might consider a hands-off approach, where you outsource looking after your property to a dedicated letting agent. This will provide you with the time you need to look after your other investments, or to pursue other matters.

You might feel that it’s time to cash in on your investment, having perceived that the housing boom is coming to a halt. You might do this by selling the properties, releasing equity, or remortgaging. Given the lack of conveyancing capacity, you might find that the process of selling is slower and more costly than you envisaged.