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8:03 AM, 3rd May 2024, About 2 weeks ago
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As we enter into May, finally landlords have been met with some welcome news. It comes ahead of concerns in recent weeks that landlords could be facing “Armageddon” amidst a housing crisis, coupled with delays taking landlords up to two years to sell.
But portfolio landlords have started to get clever about selling strategies and the results show it’s working.
For starters, rents are still high, sky high. A landlord recently shared that he was able to rent a semi-detached property in Rochdale for £1,200. A few years ago he would have got not more than £650. The property was originally purchased for £120K versus £140K so he got £20K equity and greater than 10% yield. It’s clear that the rental market is still booming, meaning even if you’re desperate, you might not want to sell your entire portfolio.
The key is to downsize rather than cash in. Keep your best properties by increasing rents with existing tenants who can’t afford to move, or removing tenants who can’t pay or are poor tenants – then refurbishing them and increasing rents – choosing the best tenants for long term lets. Get guarantors (who are themselves property owners) to sign AST’s and make your lettings more secure. The U.K. is still not building enough houses so you’re going to get great yields and keeping your best properties long term will get capital growth in the right places.
Plus, forecasts predict rates are likely to come down as much as 4% by the end of next year. This is welcome news for portfolio landlords who are stuck on SVR’s and paying higher rates, but are able to hold their nerve and keep properties. They might be able to refinance later this year and next onto lower 5 years fixed rates, boosting rent profits and security.
Once you’ve saved your best properties, sell smart on the rest
Cut the chaff in your portfolios (e.g. – flats, poor locations and low growth/refurbs) and keep the ‘nuggets’ (good rents, tenants and growth arears). Then use the equity from sales to purchase other nuggets or do other business ventures. Unless you’ve got deep pockets, and spotless houses, it’s time to get serious about selling the weak properties in your portfolios.
There are many landlords in this boat, and no doubt you might be one of them. Portfolio Landlords who have incorporated to mitigate Section 24 Tax are now experiencing HMRC investigations, just as they thought they were over the worst of taxes, they’re fearing the risk of costs and fines.
But selling to create a safety buffer raises challenges. To evict tenants to sell, or to get rid of bad tenants (non-payers, low rents and those not looking after houses) can involve courts and bailiffs, take forever and appeals can cause delays and jeopardise repossessions. This leads to a compounded hit on costs – several £1000’s to evict whilst you front the cost of no to low rent and repairs. On top of that there’s the worry of government rent reform bills. It all adds up.
So what’s the clever solution for the properties you have to shift?
There’s a huge choice of options: from Auctions, Modern Auctions to Estate Agents, investors, portfolio buying companies. The list goes on. That’s where Landlord Sales Agency comes in.
At Landlord Sales Agency, we’re the best solution for landlords who want to sell chunks of properties fast (most of our properties sell in less than 28 days), to recover the rest of their portfolios. We’re connected to every possible selling service, including off-market investors, the very best local agents, and a private database of over 30,000 buyers, who get text messages every time we list a sale.
With so many competitors all waiting for a chance to snap up a deal, we’re able to generate a bidding war, driving up the prices of your properties so you can squeeze out the best possible prices. What’s more, our team of the UK’s best property experts are able to sell with tenants in situ, and no matter what condition. In some cases, we’ll even pay for repairs to get you higher prices. We’re that confident, we’ll simply make the cash back on sale.
Whilst landlords need to be realistic on price – the market is still recovering – we work around the clock to get you the best possible price. We’ll also manage the entire sale for you from start to finish, allowing you to sit back and relax. All you need to do is give us a call. For the entire service, including certificates, liaising with tenants, property tours and photos, plus no fees after sale, we’ll ensure you walk away with a very comfortable 80 – 85% market value.
So get in touch. Let’s get rid of the properties you don’t want, and reinvest in the ones you do.
There’s no need to go down with the ship, we’re here to help you tidy up your property portfolios and get you back on track.
