The emerging landlord is getting younger – and more strategic
Letting agents will be as aware as any other property professional of the changes in legislations and regulations that have hit the market – and their landlords – hard over the last few years.
But new research from Maras’s sister company, Simple Landlords Insurance, indicates that it really isn’t all doom, gloom and diminishing returns.
In fact landlords appear to be rolling with punches, and it’s the younger, more professional, more strategic landlords who are coming out on top. They’re diversifying their strategies, adapting their business models, investing differently, and insuring for success… And those are all things letting agents can should be aware of in shaping their own services to meet the needs of the ‘emerging landlord’.
Take a look at the full report here: www.simplelandlordsinsurance.com/emerging-landlord.
Simple surveyed more than 500 landlords of all shapes and sizes, and found it was the bigger landlords – or those aiming to get there who are feeling best about the future and planning to further expand.
Some 38% of the landlords with two or more properties said they plan to buy at least one more in the next year – compared to 11% of landlords with single properties.
Meanwhile, 30% of single property landlords plan to sell, compared with just 8% of landlords with more than two properties.
The emerging community of landlords appears to be generally young, well-informed, and deliberate investors. Younger landlords own more properties on average – for the 25-34 bracket, the average portfolio size was 2.16, while for 45-54 year olds, it dropped to 1.48.
As well as being bigger, younger and more professional, the emerging landlord is also investing differently, and diversifying their portfolio. Holiday lets attracting the highest proportion of new entrants to the market – 22% of these are landlords in their first year, with flats right behind with 16% new entrants.
The owners of HMOs in particular are also feeling optimistic, with 43% in buying mode and just 4% planning to shrink.
Carl Agar, Director of Letting Agency Big Red House, Founder of the Home Safe Scheme, and Simple Landlords resident blogger had this to say about the findings:
“Your ‘traditional’ landlord is seeing all of these new rules imposed and their returns drop. Meanwhile those new to the market are comparing those returns to what they’d get putting their money into a savings account – and it actually looks pretty good. They’re seeing opportunity, and building the rules, regulations and changes into their business model.
“Personally, I’m looking forward to a more professional and more prosperous private rental sector, driven by a new breed of landlord investor.”
Tom Cooper, Director of Underwriting, Simple Landlords Insurance, said: “From Section 24 to Right to Rent, increased stamp duty, capital gains tax, regulation and licensing, you’d be forgiven for thinking it was all doom and gloom in the private rented sector. But our evidence shows there are landlords adapting to the changes and emerging like phoenixes from the ashes. We wanted to find out more about them.
“At Simple, we believe the right insurance can be the safety net that allows landlords to develop their strategies and their businesses for the future. Financial services need to keep up with the market and develop products that can grow with the landlords set to survive and thrive.
“The research reveals it is the landlords positioned at the larger end of the market – or aspiring to get there – who are least fazed by changes, and best poised to take advantage of increasing demand, bargain stock being sold off, and stable house prices.”