In recent months there have been some notable developments in both the residential and commercial property markets, from changes to regulations to economic shifts that have seen interest rates spike.
With a lot for landlords to keep up with, Donna Cheney, Senior Associate and Gary Robinson, Partner, who head up our Property Management Team have shared their latest market outlook.
Spotlight on the residential lettings market.
Landlords with fixed term tenancies will be feeling the sharp end of the high interest rates we’re seeing, however, there’s a flip side to this in that those with periodic tenancies or where a fixed-term tenancy is coming to an end will find themselves in a powerful position, due to strong demand for rental properties amid the current housing shortage, which is being experienced UK-wide.
The vast number of mortgage products coming to an end and higher rates are having a significant impact on people trying to move out of the rental sector, creating opportunities for landlords in terms of rental prices while demand is higher than supply. In these particular instances, it’s most definitely a landlord’s market.
Spotlight on the commercial lettings market.
The commercial market post-Covid is recovering well despite interest rate rises. A big focus for commercial landlords is energy improvements, following the Minimum Energy Efficiency Standards changes which came into play on 1st April 2023, as part of the move to support the UK’s reduction in carbon emissions from building stock.
To comply with the changes, commercial landlords in England and Wales must ensure their properties have an EPC rating of E or higher, unless a valid exemption has been registered. Previously this only applied to new leases, but now also applies to existing ones.
A great benefit to George F White's clients is that we have both commercial and domestic energy assessors in-house who have already begun advising and supporting landlords with these changes.
Challenges all landlords should look out for.
Delayed rental payments are one of the biggest issues we’ve noticed across the market. Particularly within the residential and commercial sectors, it’s a factor we expect will continue to impact. Economic pressures are of course having an impact on cash flow for people and businesses across the board (most notably within leisure and retail), so collecting rent and dealing with arrears can be extremely challenging for landlords at the moment.
That said, with rigorous financial checks and the right policies and procedures in place, it’s something we have been able to minimise for GFW clients.
Future developments to be aware of.
The Renters Reform Act has received much media attention following its announcement in the spring. Already in place in Scotland, we are awaiting a clear timeframe for regulations to come into play in England and Wales, however, we’re keen to reassure residential landlords that this will likely put them in a better position. The Act is in many ways simply tightening up on rules already in place around antisocial behaviour or tenant arrears, which should work in landlords’ favour overall. You can read more about our thoughts on the Reform Act here.
How we can help.
Whilst the current backdrop may seem less than optimistic at present, we’d encourage landlords to use this period as an opportunity to plan and prepare for the future months, to put them in the best position possible once the market takes an upward turn.
Our unique structure with multiple services under one umbrella team, means clients can fully rely on us for a collaborative and structured approach. This also means we can always offer excellent customer service, advice and communication, which is often the biggest issue for our clients who come to us from other agents. Whilst the market outlook currently appears changeable, we will be the constant you need to navigate the way ahead.
For more information, contact Donna Cheney or Gary Robinson on 0333 920 2220