We are seeing no indication of the lettings market slowing down. Demand is still dramatically outweighing the supply and if anything we may see more tenants looking to move this year, after staying in longer term tenancies during the pandemic. The desire for tenants to move, plus the normalisation of the universities means we are likely to see even more demand for both professional and student accommodation over the next twelve months
Rents may have been temporarily raised to fit in with the demands, however we would expect most landlords to be able to benefit from rent increases this year, providing the property remains to a good standard. If not, having maintenance and refurbishment completed this year may even increase rents further. Landlords should be speaking with their existing property managing agent or approaching one if this is something of interest for this year.
“The lettings market is undoubtedly in an extreme state. A combination of factors which include a reduction in properties coming to the market due to the slow down in development, tenants staying longer in their properties and landlords exiting the market due to increased legislation have resulted in a very real shortage of property being available. In some instances we have genuinely seen properties being rented in minutes of them coming to the market.”
We predict a potential increase in commercial lettings and commercial management, ‘Property Investor Post’, comments that commercial tenant demand may increase due to an increased demand in care homes. This is due to cases of long-covid and increasing cases of dementia. In addition commercial lets may also become more appealing to those businesses that thrived during the pandemic whilst working from home that will now look to secure bigger spaces.
“Commercial landlords have probably had the most significant impact on their business models over the pandemic. This has partly simply accelerated what was happening in a slow and painful way to parts of our high street, but it has also encouraged innovation with not only more coworking but spaces providing a genuine mix of small and large traders and some bold plans involving complete redevelopment of areas (such as the redevelopment of Newport Market). There have been and will be more casualties but those that can adapt in the right way will be rewarded in the long term.”
The Modern Method of Auction has become increasingly popular in recent years and sellers are starting to see the benefits, including an invested buyer, a fast sale (within 56 days) and no selling fees to pay. We have seen this side of the business grow significantly through our sister company James Douglas Sales & Lettings and Auction arm that was introduced last year, and to echo this Estate Agent Today make similar comments around the significant growth of the MMOA provider, Iamsold.
We expect 2022 to see even further growth in the Modern Method of Auction as house prices continue to increase and as sellers become aware of the benefits of auction and the improved accessibility of listing this way.
“We have seen that offering vendors multiple routes to sell their property allows agents to offer a bespoke service to each client and not push down a route which may not fulfil their expectations. Recent evidence suggests that the main thing sellers want to see change is the speed it takes from deciding they want to sell to actually handing keys over and MMOA with a 56 day deadline caters for this need.”
“The partnership with James Douglas has gone from strength to strength and during this period we have recognised them for their auction performance which measures how much of the agents stock registered is listed for auction”
“Auctions are no longer the avenue of last resort to dispose of a property. Whilst it is still an effective way of demonstrating an independence of sale price for those that need it such as receivers, in many cases it is just a very efficient way of achieving a sale in a more reasonable period of time with a huge reduction in the chances it will fall through, giving people certainty of sale. It’s not right for every property which is why it’s right to get professional advice, but it’s certainly worth considering your options when coming to sell.
Whilst its not our favourite topic, we cannot ignore the significant pieces of legislation coming into play this year for welsh landlords and with the recent news on leasehold funding for cladding.
For landlords, we will be seeing the Renting Homes (Wales) Act 2016 coming into effect in summer this year, meaning new occupational tenancies and a permanent introduction of six months notice periods. 2022 is also the year that landlords and agents will need to renew their Rent Smart Wales license if they have joined since the inception of this 5 years ago.
For leaseholders, the positive news is that there has been a pledge from the current UK government to protect leaseholders by stating they will not be required to pay for any defect cladding on the apartments they own. It appears that government funding will be available, including the Building Remediation Passports in Wales that were announced late last year. Seraph are currently working with responsible persons of buildings with cladding defects over 18m and completing applications for this.
“Reform of the private rented sector has been needed for some time and whilst we welcome the final introduction of the Renting Homes Act, it was not bold enough to create the balanced environment of allowing tenants to have somewhere they can genuinely call home whilst also giving landlords the confidence to invest, improve, develop and grow their portfolio increasing the supply of good quality housing. We are already seeing the predicted slow down and, in some areas, retraction of the private rented sector due to piecemeal and poorly thought out legislation and this is only going to be further exacerbated by forthcoming laws unless they are developed in a way that genuinely listens to the sector.”
“When it comes to building safety the devolved aspects have made it very confusing for leaseholders, owner occupiers and landlords alike. The Welsh Government has left leaseholders in the dark for far too long whilst Westminster has at least attempted to resolve some of those worst affected. We were one of the first to say that the issues coming out of Grenfell would have a wide ranging impact on people’s ability to sell their property and we are now becoming gripped by that problem. Saying that, the wait and see approach does seem to have resulted in the Welsh Government taking a much more holistic approach to building safety and trying to resolve a broader range of issues which ultimately could be more effective than the Westminster line. However, the amount of information available is limited, so we shall have to wait and see. The problem is, many leaseholders don’t have the time to wait before they lose their home.”
One of the (few) benefits of the pandemic was the wave of efficiency in relation to property technology. The industry dramatically improved on its technology and businesses and clients both benefited from this advancement. We saw all contracts, referencing, meetings and day-to-day management move to online systems. Technology has had to advance even more to keep up with the online/hybrid demands of agents and so we predict an even further shift towards the use of technology in the property industry.
There are lots of solutions available that will help agencies, and the customer has become more adaptable to these solutions which makes transitioning easier for all.
“The last two years have accelerated the public adoption of technology like a slingshot. Technology that was seen as a gimmick or just for high-end properties such as video tours are now essential for every listing. However the proptech industry is still very fragmented providing solutions that don’t talk to each other or not aggregating data that is freely available and ultimately being too expensive to deploy. Here is hoping 2022 will start to see more software that provide more practical solutions to the day-to-day issues enabling landlords and agents to manage and market their properties more efficiently and ensuring tenants get information how and when they need it.
Overall, the predictions for the industry are hugely positive as we see growth and development after the pandemic. If you are a landlord or seller, you will benefit from increased house prices and increased demand that will drive up the market. However, as time goes on, the ever-changing and increasing legislation for those in this industry is not slowing down. This means that its even more important to appoint a managing agent to guide you through processes such as Rent Smart Wales, The Renting Homes Bill and the Building Remediation Passport for leaseholders.
If you are looking for a property managing agent for your rental property or leasehold development, don’t hesitate to contact us.