Published: 07/12/2021What are your plans for your buy-to-let business next year? Buying your first rental property? Upgrading your portfolio? Or expanding into new parts of the lettings market?
Keeping up to date with market trends is the cornerstone of any successful business, and being a landlord is no exception. By offering homes that match modern lifestyles, you'll continually attract high-quality tenants and market-leading rents.
Some of next year's trends began life in city centres and are spreading further out, while others are a reflection of evolving home life. Flexible, sociable and economical are the buzzwords, with climate consciousness, energy bills and outside space among the biggest concerns of tenants, while new business models are creating more profitable returns for landlords.
In this article, we take a look at where the lettings market is going so you can plan your buy-to-let strategy for 2022.
GARDENS & OUTSIDE SPACE
The garden took on many new roles during lockdown, with additional duties of pub, cafe, coffee shop, park, gym and even office. Searches on the property portals became more focussed than ever before on homes with some sort of outside space, and there's no sign of that changing.
A recent study by Rightmove found gardens topped the list of renter ‘must haves’, with 49% of tenants saying they valued outdoor space above all else. So if you're looking to begin or expand your portfolio, don't underestimate the draw of a garden or balcony.
Tenants will usually buy their own outdoor furniture, but consider these qualities for an outside space that gives year-round enjoyment:
- Attractive and easy to care for
- Decking, patios and simple planting
- Exterior lighting
- Outdoor heating - an infrared heater is an inexpensive touch of luxury
- Privacy - even a trellis on top of a wall or fence can make all the difference
WORKING FROM HOME
A recent BBC survey said 79% of business leaders and 70% of the public thought that working from home would continue in some form.
The pandemic has shown that people don't necessarily need to fit their lives around their work anymore, and many are seizing the opportunity for change: some by going self-employed, others through flexible working that mixes days at the office with days at home.
This means single bedrooms have found a new life and audience. Historically landlords might have sought out two double bedrooms to attract sharers, but one double and one single bedroom is the perfect solution for couples or singles who need a dedicated workspace at home.
Of course, some people simply need a place to sit with a laptop that isn't the sofa or bed. Aside from dining tables and breakfast bars doubling up on duties, we see small desks appearing in bay windows, alcoves, under stairs and on landings as people create unintrusive corners to work from.
So it's worth identifying locations within your buy-to-let that are suitable for a home workspace so you can help potential tenants see how well your property works for their life.
Two of the biggest news stories right now are climate change and rising utility bills. It's a double whammy that's causing everyone to look even harder at their energy consumption, for both the cost to the planet and to their bank balance.
Tenants are asking more and more about bills and energy efficiency when we're out on viewings with them, which makes the energy efficiency of your buy-to-let an important factor in its rentability.
Not all energy improvements are expensive or require major work, and you can start with simple solutions like:
- low-cost flow restrictors to taps and toilets to cut water consumption;
- room and radiator thermostats to optimise heating use;
- insulation of the hot water tank
- draft excluders over letterboxes and around doors to reduce heat loss
- appliances with an eco function (be sure to ask your agent to point them out).
If you've not heard of co-living, think of it as a deluxe version of typical HMOs and multi-lets. It's become big in purpose-built apartment buildings from corporate landlords, but there's nothing to stop private landlords increasing their income by offering something similar in houses.
Tenants already share, but co-living gives them a more coordinated experience in terms of their rent, outgoings, home life and the way a property is run. Think:
- weekly cleaning
- bills included
- a focus on design-led specification
- smart TVs and desks in each bedroom;
- comfortable & sociable living spaces with high quality furniture
- en suite shower rooms
BUILD TO RENT
If you're looking to scale your buy-to-let business, have you considered building to rent (BTR)?
As the tax liabilities for buy-to-lets have increased, landlords are exploring more profitable models. By building their own rental homes, each one costs less to buy and upfront costs like Stamp Duty are slashed.
Initially earmarked by the government as something to prioritise in large cities, BTR is now spreading to suburban areas and beyond.
Most new-build homes are built around owner-occupiers who tend to prefer private spaces, but tenants appreciate shared amenities like communal terraces, co-working areas and social events. The idea is to create a place where tenants stay longer by making them part of a permanent and dedicated rental community.
Building to rent also gives you more control over maintenance and repairs. When you own the building and all the apartments within it, you can simply get on with works without needing to wait on the owners of each individual home for consent or access.
As the needs and demands of tenants evolve, landlords are responding in imaginative ways to improve their homes and create more profitable buy-to-let models. In any manner, it's important to keep up with trends to have a consistently well-performing portfolio.
If you're a landlord with a rental property in or around Berkhamsted or Tring, and you're looking to work with a letting or managing agent to help you choose the most profitable route, why not get in touch? Our award-winning lettings team would be delighted to hear from you.
Berkhamsted office: 01442 863000
Tring office: 01442 820420