A Year Of Mixed Fortunes For City Landlords Predicts Accord Lets
5 December 2008
BIRMINGHAM landlords can probably look forward to a year of mixed fortunes in 2009 and using a pro-active agent will be more important than ever, according to Carl Mimmack, Managing Director of one of the city's leading residential letting agencies.
In the Royal Institution of Chartered Surveyors' quarter 3 2008 survey, the national picture shows growth in new instructions outpacing growth in tenant demand and rents falling for the first time since 2003.
However, in Birmingham city centre Accord Lets has been offering incentives to attract new landlords as tenant demand outstripped supply from September to the end of November.
"We can't attribute all this success to our superior, independent service which attracts tenants because they know we can be relied upon, but it plays a huge part," said Carl Mimmack, Managing Director of Accord Lets in West 2.
"However, many of the city's tenants work in the financial sector and if the credit crunch continues and institutions start shedding their workforces, this will mean fewer tenants and this always leads to downward pressure on rents. There are also new developments on stream such as The Button Box.
"When there is more choice for tenants it is vital landlords use a pro-active agency which maintains regular contact with applicants and attracts new tenants - our move to offices in West 2 has certainly increased footfall which is another reason we've been so successful this year.
"Landlords are enjoying higher gross yields at the moment because property prices have fallen so dramatically and the interest rate has reduced, so the gap between mortgage repayments and rental income has widened and meant more profit. Those who have bought repossessed properties at auction are faring the best and all our landlords are in a better position than they were 18 months ago.
"We anticipate that more professional landlords will be looking to increase their portfolios in the new year because house prices will remain low. Plus with a lower VAT rate any refurbishment required will be less expensive.
"We also anticipate new investors buying property to let while prices and costs are low - and they have plenty of choice in a buyers' market. There may also be a flurry of activity when people believe prices have bottomed out and if the Government's tax reductions have the desired effect.
"Apartments still attract higher rents per purchase price than houses and we urge any new investors in the city, or landlords looking to amend their portfolios, to seek professional advice from an experienced agency such as Accord Lets if they want to maximise their returns.
"Choice of property is critical and with our experience spanning almost two decades we know what lets quickly, attracts the highest rent and historically appreciates most in value in the long term.
"We can guide landlords through everything from legal obligations to tenant credit checks, deposit protection and rent collection, essential for new landlords as the laws regarding rented property have been significantly tightened in recent years.
"2009 will probably be a year of mixed fortunes, so landlords should do everything they can to get an edge."