Support, Advice and Experience within the Property Market

Robert Ulph looks into his crystal ball for 2015?

From Robert Ulph on January 1, 2015

As the Eastern Counties representative for ARLA (Association of Residential Letting Agents) I attended the national ARLA representative’s conference just before Christmas where I had the opportunity to speak with other regional representatives across the country.

From the general discussions it appeared that the vast majority of their members were all experiencing a similar phenomenon – a shortage of good quality residential accommodation. There are more prospective tenants seeking accommodation than suitable property to house them.
The imbalance in the market place has been further exacerbated by a proportion of landlords deciding to crystallise recent capital growth and taking a profit as a result of a rapid increase in house prices that occurred at the back end of 2013 and continued for the first 6-8 months of 2014.

The current lack of supply of rental property will inevitably lead to further rental increases as we head into 2015 and we anticipate 2-3% increase in rental growth that will be underpinned by an increase in salaries as a result of the expected economic growth in the region over the next 12 months.

With the oil price falling by 50%, general inflation has slowed and will continue to do so, which makes rises in interest rates less likely in the foreseeable future. Whilst there has been a massive shake up in the mortgage application procedures the continued low interest rates have resulted in some exceptional mortgage deals for those who are able to take advantage.

In addition to the market expectations the political landscape may well change in 2015 and at best is uncertain, however, the private rental sector remains a political football and needs further regulation and the mandatory licencing of letting agents – unbelievably anyone can set up as a letting agent handling clients’ money, tenants deposits and profess to be suitably qualified to manage landlords valuable real estate assets.

The only licencing in the current market is voluntary through organisations such as ARLA and RICS (although from 1st Oct 2014 all letting agents have to belong to a re-dress scheme) – if you use a letting agent beware those that have not signed up to a voluntary licencing scheme.
Whichever political party gets to number 10 we can expect the introduction of further general legislation, such as the Immigration Act 2014, which will is likely to be rolled out nationwide following a trial in the West Midlands.

Under the new Act, landlords will be required to make ID checks to establish the immigration status of all prospective adult occupiers before a residential tenancy agreement is granted. The penalties for a landlord or letting agent for not making the proper checks on tenants will be very costly and charged per illegal occupier found at the property.

In conclusion I predict that 2015 will be another good year for the residential investment market with both rental and capital growth to be enjoyed in the short and longer term. However, landlords beware new and existing regulation and legislation in an increasingly complex sector and I urge you to seek professional advice from properly qualified and licenced Lettings and Property Management firms.

If you are considering taking advantage of the opportunities afforded by the residential investment market please do not hesitate to get in touch, I should be very happy to have an informal chat.