In Catalonia they have a lovely old expression when bidding farewell to a friend. “Que no haya novedad”. “Let no new thing arise”. Because as we know, change usually means trouble. But in business change must be seen as an opportunity to be embraced. Possibly the biggest change to hit business in living memory was when Sir Tim Berners-Lee developed something he called the World Wide Web and look at where that has taken us?
In the private rental sector change has come about due to consumer demand for higher standards and legislation to ensure fair, compliant management of rental properties. There are now around 140 laws and regulations relating to landlord and tenants, well over half of those introduced since I joined the industry.
This raft of legislation means it is increasingly difficult for smaller landlords who entered the market decades ago to keep pace. Back when I started out, getting a mortgage was simple. You wrote your salary on a piece of paper and the nice man (it was always a man back then) at the bank told you how much you could borrow. You could re-mortgage very quickly and realise up to 90% of the property value so building a portfolio was relatively simple.
Today the mortgage market is heavily regulated requiring in depth checks on income and finances. Add to this a requirement to verify tenants right to live in the UK, the loss of various tax breaks, tenants rising expectations of high standard accommodation and change can spell a perfect storm for some old school landlords, many of whom are selling up and quitting the sector.
But where one door closes another one opens, such is the nature of change. The private rental sector has never been more buoyant. Having doubled in size since 1997 the sector now outstrips social housing. While newcomers to the market may include large, institutional investors we are taking instructions today from some of our past tenants.
Millennials first experience of tenancies may have been high standard, purpose-built student accommodation. From there they may move on to high standard rental property, initially through our ‘ProShare Plus’ scheme. Today many are in well paid jobs and are looking to build a property portfolio. It is interesting, possibly obvious, that the properties they seek to acquire are of the highest standard. They simply cannot envisage owning a property they would not be prepared to live in.
Thus, the change in standards driven by market forces and regulation are providing new investors at a time when many of the previous generation of landlords are heading for the door. As these new investors are busy professionals they require a fully compliant, efficient management agency to administer their property portfolio. Cue quiet smiles and the full embrace of change here at Heaton Property.
The expression “Que no haya novedad” always makes me smile but in reality, lack of change equates to stagnation. In the words of American author Hugh Edmonson Prather III, “Just when I think I have learned the way to live, life changes”. Long may it continue.