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Now more than ever, homeowners are feeling the squeeze of a rising living environment. As a result, conditions are increasing, with more and more money needed to afford factors such as heating, electricity, and general upkeep. Because of this, private renting levels in Britain have hit record highs.
With growing numbers of people looking to get onto the property ladder through renting, many investors are looking to take advantage of the heightened situation in the market. Renting can seem more affordable to many potential customers due to more significant mortgage rates, among other factors. Landlords must use this time to reflect and ensure the decisions they are yet to make provide a positive outcome for securing future business.
Why the Rise in Private Renting?
The significant increase in housing costs has been attributed largely to the demand for rental properties exceeding the supply, leading to fierce competition between potential tenants. In a lot of places around the country, first-time buyers are finding themselves being priced out of buying their own property, having to rely on rental agreements to have a place to live.
When compared with last year, tenant demand was recorded at a 20% increase, whereas the total percentage of available properties dropped by 9%. This means that the demand is continuing to rise away from the supply, causing more fierce competition to arise for people seeking to attain rental agreements.
With that in mind it’s no surprise that smaller properties are becoming more viable options for those looking to rent, with assets such as studio flats increasing in demand. Property Reporter has stated that,
‘Competition between tenants for available studios is 71% higher than it was last year, and there are now four times as many tenants looking for a studio flat as there are studio flats available.’
What Does This Mean for Landlords?
With so much more on the line at an intense period for landlords and tenants alike, no verdict can be made lightly. To protect their business and income, landlords need to ensure that looking at the bigger picture becomes a regular occurrence. The butterfly effect is in full force, with many seeing small decisions affect the longevity and overall outcome of their business.
Rising Overheads Causing Turbulence
Due to rising tax rates and the cost of living, landlords are having to factor these external factors into their decision-making process moving forward. Because of this, landlords are facing a tough decision. The choice between increasing rent and selling up is one that shouldn’t be taken lightly.
A proportion of landlords are considering selling part of their property portfolios, with the effects having the potential to reverberate throughout the market. Ultimately, owners of buy-to-let businesses will have to choose whether to risk facing the increasing costs of vital overheads or may have to sell their properties to keep themselves afloat.
Why is Buy-to-Let Insurance Important?
Although landlords are watching their revenue a lot more to ensure they retain financial stability, Landlord insurance is essential for ensuring landlords remain protected. The legal end of the spectrum can be a sizeable chunk of stress for many landlords, with proceedings taking up time and money.
Legal fees can become increasingly expensive if a landlord needs to take legal action against a tenant, which can be devastating at present. Landlord offerings can offer support throughout the process, ensuring that landlords have their backs covered in the unfortunate event of a court case.
General Insurance Can be Vital
The little things can’t be overlooked at a time like this, with factors like accidental damage and theft causing an accumulation of stress for policyholders. Finding the perfect insurance policy to suit landlords’ needs is essential, ensuring that landlords can focus on the larger picture whilst remaining confident that the day-to-day running of their business is protected.
At Source Insurance, we have recently enhanced our Landlord offering to suit our customers’ growing needs for cover. You can take a look at our press release here. To get in touch, visit our website: www.thesource.co.uk.
The Guardian. ‘Private rents in Britain hit record highs, with 20% rise in some areas.’