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Landlord Interview with Advocate Finance BTL/Commercial/
Bridging Loan Broker

Having a casual interview

A Landlord’s View of the Buy-to-let Market Today:

The news today is full of gloomy reports and forecasts focusing on the cost of living crisis, rising fuel bills & a sagging housing market. As a prominent Buy-to-let (BTL) mortgage broker in Colchester, Essex, we wanted to get a view of the condition of things in the real world. How are our landlords (and their tenants) coping in the current economic climate?

We contacted one of our regular clients, Alex Osborne, to find out his views on the current property and rental market. Alex is a landlord with properties in the Oxfordshire market town of Banbury. With its mixture of traditional Victorian housing stock and newer builds, the surrounding mix of light industry, rural & retail employment typifies the profile of many small English towns. Banbury has felt the effects of the economic slowdown much like the rest of the country; so what are Alex’s thoughts on the current property and rental market in his area?

Tenant Woes

Perhaps surprisingly, Alex’s first reflections expressed sympathy for the position of tenants. Increasing interest rates, plus the stricter government rules on Section 21 eviction notices and EPC regulations have caused many ‘part-time’ landlords to sell up. Former Chancellor George Osbourne’s Section 24 tax relief changes have been especially damaging for many landlords’ ownership strategies, adding to the problem.

All these factors have contributed towards a growing shortage of properties for rent, driving up prices. Whilst this is good for landlords remaining in the market, it is the opposite of what the government intended, leading to a very tough market for tenants. It also reduces housing market flexibility: whereas before, tenants had greater freedom to move, now “more people are trapped, with poorer conditions and higher rents. Unfortunately I can only see this getting worse. I’m not very optimistic.” says Alex.

This situation is also bad for the overall economy, as there is a resulting shortage of available rental accommodation for people who need to move for employment purposes. This is especially the case for the kind of smaller properties, like studio apartments and one-bedroom flats, which are essential for people looking to relocate for a new job.

The effect of these government measures has been particularly marked on landlords with smaller portfolios, who perhaps retain BTL properties as part of an overall investment mix, alongside shareholdings and their pension pot, intended to provide for retirement. Professional landlords with larger property holdings are better placed to ride out the current market conditions, Alex believes.

Top Tips for BTL Investors

Given these factors, we wondered if Alex had any tips for his fellow Buy-to-let landlords across the country.

Fix problems as soon as possible, as permanently as possible was his top tip. “Once someone complains about something, I want to sort it so that I never get a phone call about that one thing ever again, so it’s permanently resolved.” The same principle applies to general maintenance issues too.

This is where things like compliance with the new EPC regulations come in. These are due to come into force for new tenancies in 2025. Keeping on top of property maintenance and making upgrades where required is an excellent way of keeping on top of issues like this, Alex believes. He is particularly keen on solar panels but accepts that this kind of investment is not for everybody.

Even so, investing in property improvements like glazing, extra insulation & heating upgrades, offers a variety of benefits to the landlord. It’s a great way of adding value, potentially increasing rental revenues in the long run. It can also play a part in ensuring that a property portfolio remains compliant with any new EPC requirements.

In Alex’s experience, this positive approach to repairs and maintenance is better for business (and cheaper in the long run), as it helps to build an atmosphere of trust with tenants. Best of all, the resulting positive relationship can lead to word-of-mouth recommendations. As a result, landlords could then be spared the cost and inconvenience of advertising for tenants. It could also potentially mitigate damage to income by shortening property vacancy periods.

As a second point, this proactive attitude is also the best way of dealing with any issues with local authorities, Alex feels. He believes it is better to resolve these matters as soon as possible, rather than waste time and energy fighting council decisions. “It’s easier just to get it done because they have the ultimate power. You’re never going to win if they decide they don’t like you. It’s never going to work”. Alex’s experience is that it is better to work with planners, housing departments, HMO licencing officials & others whenever possible; rather than fight needless battles.

As a final tip for potential BTL landlords and those looking to expand, Alex would always recommend looking for properties to improve, rather than those ready for tenants to move in. Although buying ‘off the shelf’ may appear the easier option, there is less of an opportunity to build in a sufficient margin. Buying and investing in renovations or conversions offers more opportunities to gain a greater return on investment. It also offers the prospect of being able to provide a hedge against tougher times like those of today, when interest rates rise and regulations tighten.

Overall Outlook

In general, Alex remains upbeat about the future of the Buy-to-let market, particularly for larger-scale, professional landlords. This is especially the case for BTL investors focusing on smaller properties like flats and studio apartments, where tenant demand will always be high.

As Property & Commercial Mortgage Advisers here at Advocate Finance in Colchester, Essex, the views of BTL landlords such as Alex are crucial for our business. The current cost of living crisis is a prime example of the vagaries of the economic cycle which we must all prepare for.  Given factors such as these, together with the everyday maintenance issues which are forever the burden of the Buy-to-let landlord, Alex’s optimism in the face of the general market gloom is heartening.

If anything, the experience of this successful landlord in Banbury indicates that although times are undoubtedly tough, there is plenty of scope for the intrepid to succeed even in this inclement market.

How can Advocate Finance help?

Advocate Finance is a Buy-to-let (BTL) mortgage and Bridging loan broker in Colchester, Essex that specialises in arranging funding solutions for property investors and developers. We have access to a wide panel of trusted lenders and thanks to our unparalleled knowledge of the property investment market, we are able to secure the most suitable products for your individual funding needs. We have established a reputation for truly understanding the complexities of the property finance market and providing tailor-made solutions to meet your needs. 

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