Guest Post by Property Division
The majority of renters go through small private landlords, which can cause problems for both parties. Large investors are building thousands of buy to let properties, but do they make a good alternative?
The dream of home ownership is not as achievable as it once was, thanks to unattainable property prices and huge deposits to save for. This means that more and more people are looking to rent rather than applying for mortgages, but the tenant/landlord dynamic is not always an easy one.
Managing your own rental can be notoriously difficult when you’re an inexperienced one man band with other commitments, which is why a lot of landlords choose to go via a letting agent or property management company. For those who do choose to go it alone, there can sometimes be tension between the two parties. “Of course, many renters look after their homes and take pride in them, but not everyone has the same respect for other people’s investments. Every year thousands of disputes end up in court, with landlords having to deal with damage caused by tenants” said Assetgrove.
This works both ways too. There have been countless cases of unscrupulous landlords failing to uphold their responsibilities, with some tenants going without basics or waiting for issues to be fixed for months on end. In order to deal with the challenges faced by tenants, big name developers are swooping in and offering what they’re selling as an alternative to small landlords.
Throughout the UK but especially in London, there’s been a huge rise in buy to let projects managed by property development companies. With more money and resources behind them, they can offer potential renters the sort of mod cons and facilities that smaller landlords would struggle to even consider. Many of the really plush apartments in the capital offer premium perks like 24 hour security, gyms, roof terraces, entertainment areas and state of the art technology. While the price tag is a lot higher than you’d expect from a smaller scale set up, it’s easy to see why so many city professionals are tempted by this option.
“Big property developers know that we have a housing crisis in the UK and that lots of people are struggling to find big enough deposits to buy, even if they’re relatively high earners” says Best Gapp. “They’re building high tech homes with lots of fancy extras to lure professionals into their properties and encourage them to stay long term rather than just seeing it as a temporary option until they’ve saved enough to buy.”
This gives tenants the kind of security that is often hard to find through a private landlord. One of the biggest negatives of renting is the feeling of uncertainty, because there’s always the feeling that you could be given notice at any minute if the landlord wants to sell or move back in. Renting through a big name who can offer long term options creates a win/win for both parties; tenants get to set up home and feel more secure, while developers are guaranteed long term rentals that increase their investment yields.
The number of buy to rent developments throughout the UK has grown significantly, and has recently received official support from the government. Backers believe it will help solve the UK’s housing crisis, transform the economy and improve the quality of rental properties throughout the country.
This doesn’t have to be bad news for smaller private landlords though. “The bigger developers might be able to offer plenty of perks, but the rental fees are still going to be unattainable for many” Says LDG. “There is still a place for independent landlords, but we would recommend using an agent to manage the property and facilitate the tenant/landlord relationship to make it easier for both parties.”