Will Leyland, 18 October 2017
It seems as though almost everything about modern day life is moving at a break neck speed towards progress and technological advancement – self driving cars, virtual reality, robotics running giant futuristic warehouses and, of course, smartphones being able to do everything from bring us a takeaway to scanning us for health issues.
With this in mind it sometimes feels like Buy-To-Let (BTL) hasn’t moved forward as quickly in the last thirty years. More or less the process remains largely the same besides much of our business being done online. Even then, though, much is still done face to face, such as viewings and signings of contracts.
Perhaps we’ve failed to recognise how far things have come even since the turn of the millennium, with process and trends moving quickly away from the traditional way of doing things. Most significantly, however, was the financial crash of 2008 which saw the financial markets come to the brink of collapse thanks largely to irresponsible lending.
So with people’s tastes regarding rental housing changing, the way people find housing changing and how we finance our property changing, what can we expect to come in the future?
Trends for housing
In March last year, The Daily Mail quoted research by GoCompare Mortgages who asked 2,000 Britons what their top property must-haves would be. The results were quite surprising; moving significantly from the early 2000’s where location for schools and architectural features were key.
The top priority for renters and homeowners alike was good central heating and energy efficiency, showing how far we’ve come in terms of being environmentally and financially conscious as well as financially aware.
Central heating, double glazing, energy efficiency rating and wall insulation all make it into the top 20 most desirable features of a house, whilst central heating and double glazing occupy numbers 1 and 2 on the list respectively.
Proximity to good schools and amenities will, of course, always be an important feature but as populations draw ever closer to city centres and urban areas transport links to places of work will become increasingly important. Cars on the roads are already becoming a huge issue across the UK with the government seeking to invest heavily in rail networks to offset this.
With this in mind landlords should expect to be focusing on transport links, energy and heat efficiency, broadband speeds and mobile phone signal as key features of any BTL investment.
Ways of finding housing
Despite the fact that online alternatives to finding property are already prevalent there still remains a favoured place for face-to-face interactions in viewing and negotiating on properties, but is this likely to change?
As quoted by PropertyReporter, new research by LetBritain shows that nearly 13 million Brits favour online platforms.
An independent, nationally-representative survey of 2,000 UK adults commissioned by virtual letting agency LetBritain has revealed that over half (51%) prefer going online to buy the vast majority of products and services they use.
What’s more, 45% favour online services over ones that require them to go into a physical premise, and 29% actively avoid those businesses that do not offer an online service. People in the capital are the most technologically demanding, with 62% of Londoners opting for online solutions and half (51%) consciously avoiding businesses that do not offer online services.
There will always be a place for high street agents as tenants like to have a face-to-face contact to be able to liaise with and attend viewings with, but that’s not to say you shouldn’t ensure that the agents you use aren’t looking towards the future, after all can any of us say with confidence that we can’t see a future where viewings are done via virtual reality?
Pre-2008 it seemed like anybody could get a BTL interest only mortgage. This was never a sustainable model of business and, inevitably, it crashed towards the end of 2007.
Thankfully things recovered to an extent so whilst we don’t quite live in a world where nobody is allowed to buy property without having its value in cash, things are now much stricter in terms of lending criteria.
It’s fair to expect that in order to grow your portfolio that lenders and banks may want to see a healthy financial history and sufficient proof that you’re financially stable compared to 15 years ago.
Regardless of how we see the BTL market moving forward in the near future, profitability and demand will always persist and so the market will always innovate and change, the only question is at what speed that might be?
Will Leyland, 18 October 2017