Warren Lewis caught up with Frazer Fearnhead from The House Crowd
1: How have you found the rental market this year?
“We have found the rental market to be increasingly strong this year. We have several prospective tenants competing for each property we advertise and void periods are virtually nil. Some of our properties are now achieving 10% more rent than last year. Given the increased cost of moving, tenants are also staying far longer in one property than they previously might have. Our average yields are currently around 11-12%.”
2: This year letting agents fees have been scrapped in Scotland, how do you feel about the same being done in England?
“I think this is utterly ridiculous. Letting agents need to be paid for a professional service. Undoubtedly there are some unethical letting agents who charge exorbitant fees, but market forces should dictate that both landlords and tenants will avoid using them. As long as the law makes it clear that any charges need to be transparent and provided in writing before any commitment is made, there is no reason to prevent agents charging what they want. No doubt they think landlords will just bear the extra costs - on top of everything else.
You would think given the housing shortage, the Government would be trying to encourage investors and landlords to convert more empty properties and rent them out rather than continually imposing more costs and restrictions on them!”
3: Is there really any difference between letting agents and landlords anymore?
“Renting property is an activity that can be beset with high emotions on both sides. I think some tenants still like to use letting agents as it takes away the emotional angle and can be an advantage if there are any problems, as letting agents can act as an impartial mediator between the tenant and landlord, providing the tenant with a sense of security. However I think there is a growing feeling amongst landlords that letting agents don't do an awful lot to earn their money and given the proliferation of "online letting agents" that allow landlords to advertise on all the same portals an agent can and companies that offer low cost property maintenance contracts (some with 24/7 service) there are fewer and fewer reasons for a landlord to use a letting agent."
4: How would a landlord make best use of social media?
“It is becoming increasingly common for landlords to use Facebook to show off their available properties and build a tenant database. Twitter is also a good platform on which to inform followers of property availability. For prospective tenants, staying aware of landlord and letting agent Twitter feeds can be the difference when trying to secure a property in a competitive market, such as Manchester city centre.”
5: Is now a good time for landlords to increase their portfolios?
“Absolutely, it is currently the best buyer’s market for 20 years. The only hindrance is the number of cash investors on the lookout means competition to get the best deals is extremely fierce.”
6: What are your predictions for the market in 2013?
“Outside of the capital, I expect house prices to remain flat in most parts of the UK. Repossessions look set to continue to increase as families find the going gets tougher with interest rates remaining the same.
Rents will likely rise by around 5% as greater demand pushes them up - especially at the lower end of the market. I expect more finance will become available for first time buyers in the latter part of next year.
The Department for Work & Pensions’ Universal Credit proposals are in my opinion completely unworkable. I would not be surprised at all to see a government back track when it realises nobody will rent to LHA tenants if they cannot get paid directly. The councils simply won't have anywhere near enough properties to house people. Frankly, the whole idea is massively ill conceived, probably by some pinstriped politician who has no concept whatsoever of the reality of the attitudes and lives of unemployed people on benefits.”
