Alan Cooper MARLA Hazel Grove Branch Manager talks about whether now is the right time to sell property portfolios.
We have been approached recently by a number of landlords enquiring about whether now is the right time to sell their portfolio of properties and whether there is a demand for properties with sitting tenants.
We have therefore looked at this and tried to give a balanced view.
Having dealt with rental properties for many years, we understand the pressures that landlords have been under in recent years. Legislation has been on the increase:
* The removal of tenants paying referencing fees;
* Mandatory EPC’s having to have a minimum of an ‘E’ rating;
* EICR Electrical reports now mandatory every 5 years;
* Installation of smoke and CO alarms;
* Changes to the “Right To Rent” legislation due to Brexit;
* Changes to Capital Gains Tax;
* Changes to “second home” stamp duty and
* Changes to the Digital Tax Regulations (MTD).
Whilst the EPC, EICR, and smoke/CO alarm changes (in conjunction with the Gas Safety Record) have certainly helped to ensure that rental properties are in a better, more efficient and safer condition, there is always an expense to be paid which (quite rightly), falls on the landlord.
The rental market through this period has remained strong and some of that expenditure has been absorbed due to the increase in rent.
However, there is more legislation being proposed and the “Renters Reform Bill” is due to be heard in parliament through 2022. If these do get passed it would be heralded as the most dramatic changes to tenant/landlord legislation since the the Landlord & Tenant Act in 1985. Some of the changes that are being proposed are:
* The scrapping of “no fault evictions” – in essence the scrapping of The Section 21 Notice and changes to the Section 8 notice with the process moving through the courts.
* Lifetime Deposits meaning tenants can move their deposit from one property to the next
* Rogue Landlords Database which can be accessed by tenants and agents
* Increasing the minimum EPC rating to “C” from the current “E”
* An amendment to the Dogs & Domestic Animals Accommodation Protection Bill which relates to tenants having pets at the property
These are due to be heard in Parliament this year but, at the time of writing, no date has been set.
Whilst the legislation has been changing, so have the rental figures that are being achieved and whilst the legislation can be seen as a “con” there are also “pro’s” to balance this out.
* You have a property that will continue to increase in value and can be sold
* You get a regular income on a monthly basis
So, is now the right time to sell your property portfolio?
House prices have never been higher and the demand for properties does not seem to be diminishing. We expect mortgage interest rates to continue to rise through this year and the phasing out of Mortgage Insurance and Tax Relief will continue to put additional pressure on landlords.
As a result, Lawler and Company have now established a section of our business to specifically cater for this section of the market. We can offer advice on whether to sell with a sitting tenant or whether to sell as an empty property; What sort of impact this has on the type of buyer that you are aiming the property at and how that impacts on the price that will be achieved; Whether to sell your portfolio as individual properties or to sell them as one portfolio; What method of sale will best suit your needs and we are able to offer special rates for landlords selling more than property.
Should you sell your rental portfolio? Our teams at Lawler & Co. are on call to help with this and any other queries you may have.
36 Stockport Road
Tel: 0161 914 7620
Hazel Grove Office
128 London Road
Tel: 0161 300 7144
60 Park Lane
Tel: 01625 448 001