According to the rental index results provided by Belvoir for the third quarter of 2013, landlords are continuing exiting the property market. However, this happens not on the fast rate that previous research has shown. The Q3 research by Belvoir also shows that eviction rate remains pretty low, while rents are showing a slight decrease. Still, franchises are forecasting the rise of the rents until the end of 2019. Additionally, franchises report that BTL remains a good medium to long-term investment in many areas of the country due to the fact that buyers make extensive research before they make a purchase.
Commenting the results of the rental index revealed by Belvoir’s Q3 report, the CEO of the company, Dorian Gonsalves, says: “The Belvoir rental index, which is now in its 10th year, produced some interesting results. Earlier this year I forecast that rents would remain pretty flat throughout 2018 and the Q3 rental index confirms this with a slight decrease in rent of -1.25% year-on-year versus Q3 2017, and a monthly rental average of 730 British pounds. This decrease seems to be due to a combination of lower rents/rises for larger properties, which traditionally have driven average rents upwards."
“There was no real change in void periods during Q3, suggesting a relatively healthy demand/supply for rental properties. Eviction rates remain extremely low, with over 50% of Belvoir offices carrying our zero evictions in Q3. The number of offices evicting four or more tenants is on the rise, but key reasons cited are non-payment of rent or landlords selling their properties, which cannot be legislated against.”
The Belvoir’s research also shows that, as expected, tenants stay in the properties they rent for the duration of time that suits them. Since the start of the research in 2008, the period of time people are staying at the properties they are renting has risen significantly from 13-18 months in the beginning to 19-24 months now. As the report suggests, two-year tenancy contracts and agreements are now more preferred by tenants.
Furthermore, the results of the research shows an increase up to 52% of landlords selling up to three properties and almost half of the landlords selling between four to five properties. The results are in comparison with the second quarter of the year. Still, there is a decrease of 17% of landlords selling from 6 to 10 properties. So the research suggests that the overall number of landlords selling properties is increasing.
As suggested by the report, the main reason for landlords to exit the real estate and property market is due to tax changes, constant regulation, and increasing legislation, landlords moving back to their properties, lower investment returns, uncertainty over Brexit. When it comes to property selling, 19% of the properties have been sold to first time buyers, but 33% of the properties have been sold to other landlords, and 23% are general sales.