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News: Agency says 85% of branches are seeing landlords quitting sector

Wed, 07 Mar 18

Belvoir says there is no evidence of a large-scale sell-off of buy to let properties by beleaguered landlords, but 85 per cent of its franchised offices are reporting at least some investors quitting the sector.

The company says that this is contributing to the latest findings of its index suggesting that significantly less stock is coming on to the market.

“Although we are not seeing a big landlord sell off yet, our franchisee survey confirms that over 85 per cent of offices are reporting that landlords are selling some properties,” says Belvoir chief executive Dorian Gonsalves.

“The largest number of properties being sold remains up to three per branch. Overall in 2017, a higher proportion of offices - 15 per cent in both the second and fourth quarters of the year - saw six to 10 properties sold. That’s a higher percentage than seen in the previous year” he says.

Gonsalves warns that it must be taken into account that landlords have only just completed their tax returns, and this will be the first time since mortgage relief rates were partially reduced. He says definitive results from this - if it leads to a major sell-off - will not be identifiable until the third quarter of 2018. 

“During [the final quarter of last year] rents remained fairly static” he says. 

“This is due to the fact that that inflation and wages have caught up with each other, which typically means tenants don't have the spare cash in their back pockets to support higher rents. In London we even saw rents dropping slightly. For all Belvoir offices who have traded consistently since 2008 there is a two per cent increase year on year, and when compared to the 2016 annual average, the rental increase is 3.25 per cent.”

Belvoir’s data shows that tenants are continuing to stay in their properties longer, with over half preferring a tenancy of 13 to 18 months, and almost a quarter opting to stay for 19 to 24 months. 

Despite the time of year, tenant arrears and evictions fell back in Q4, with nearly 90 per cent of Belvoir offices carrying no or just one eviction in that three month period. 



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