The head of a firm that seeks investors to put money into residential property funds rather than individual homes for tenants has made a startling attack on what he regards as the inadequacies of some buy to let landlords.
Simon Heawood, chief executive of Bricklane, has written an article for London business publication City AM stating: “the amateur buy-to-let market has shown itself incapable of providing a service to tenants that is fit for purpose.”
The article begins by suggesting that the Fees Ban on lettings agents coming into effect this coming weekend is good news for landlords as well as tenants, and represents a bid to professionalise the private rental sector.
He also backs the increasing trend towards three year tenancies.
Heawood praises those landlords already moving towards longer tenancies but then says: “What of landlords who aren’t willing to adjust?”
He says many landlords are attacking the longer tenancies trend as another obstacle for buy to let, following tax and regulation changes. Heawood then says: ”Even landlords providing a good service to their tenants hold these views.”
He goes on to write: “The unfortunate reality is that the amateur buy-to-let market has shown itself incapable of providing a service to tenants that is fit for purpose.
“Many landlords will find that the increased effort, with decreased pay-off due to tax changes, means that it’s time to exit the market. Their places will be filled by those prepared to do the work to fit in with the new normal in the rental market.
“What we all gain in return is a rental market that provides security and stability for those who rent, in professionally managed homes. This would be a transformation from the situation today, but one that is looking increasingly inevitable.”
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just have to forgive him shooting his mouth of 32 years old and only just out of collage a wet day.....a banker !
As someone with 30 years experience in the lettings market I unfortunately have to agree with the article. All too often we find ourselves having to drag some landlords kicking and screaming into providing a decent service that tenants expect nowadays.
However to say the whole market is not fit for purpose is untrue - there are many landlords who are prepared to adapt and regard letting property as a service, not purely as an investment vehicle.
Someone else using the term 'amateur landlord' with no clues as to what he actually means. He probably doesn't really know either.
Since his site is forecasting a net rental yield of 3.4% outside London and 1.6% inside the capital, his 'professional' service is apparently not that wonderful.
A professional LL will only use a LA as a very last resort for a tenant find only and will pay max £200.
Most LA are clueless hence their decline.
Yields expected,circa 5% to 8% or more, not less.
If you use agents that charge £200 then I'm not surprised they are clueless. Professional landlords understand the value of professional agents and pay accordingly. Not sure what decline you're talking about but, if anything, with ever increasing legislation LAs are increasingly essential and offer incredible value.
Residential Property Funds? Is this Build to rent?
If so what a depressing scenario, renting your whole life in a tower block in the middle of nowhere.
I think I would prefer to live a short period of my life in a transcient community near my work or place of study whilst saving up to put a deposit down on my first property to buy when I am ready to settle down providing me with security and a hedge against inflation.
What a load of twaddle this idiot talks.
I regard my properties as investments but accept that for them to be worthwhile I need to provide an excellent service.
Isn't that what any LL aspires to do.!?
If I didn't then my properties could well become vacant and like the proverbial millstone round the beck.
So does that make me a professional even though I have only 5 properties!?
There are hundreds of thousands of LL that behave in a very professional manner; are they not professional!?
I get a little tired of all this alleged need to professionalise the sector which is basically code for getting rid of the small LL to be replaced by large corporates who will tend to let to select tenants.It is the little LL that takes massive risks by letting to tenants who would mostly be rejected by corporates.
Make no mistake corporates have their place.
But with S24 they now have a competitive advantage over the small professional LL.
Without S24 LL are perfectly able to compete with corporates.Yea there is a need for education across the board which is why I would like to see a CPC requirement introduced for all those who let a property like in the transport industry. Every driver now has to undergo 35 hrs of training every 5 years.
LL should have to do the same.
That might includes LA though LA should have more formal qualifications which I believe the Govt intends to introduce.
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