Diligence and flexibility are essential for success
Overall we have had a positive start to 2018, although across our eight offices it is apparent there is an overall air of caution in the market. We have been proactive in advising our clients on rent and presentation of their properties in the current market and we are still successfully letting homes across the county. As the Japanese proverb says, “The bamboo that bends is stronger than the oak that resists” and the most success has been achieved where landlords have been flexible to meet current demand.
Strong supply and indecisive demand
Stock has been pretty high across the board this quarter and this usually results in applicants taking longer to make a decision. Across our offices we’ve had reports of applicants wanting to view more than seven properties before making a decision. Despite this, we let more than 500 properties in the first quarter, which is down to accurate rent setting and careful applicant matching. For example, this photo below is a 4 bedroom barn conversion in Clanfield at £4,0001 which came to the market in January. We let it on the first viewing to a family who wanted to be close to Burford for their children’s schooling.
Location, location, location
Never before has this saying been taken so literally by our applicants. Search requirements have changed from “I need to be inside the ring road” to “I can’t live here because it’s too far from the bus stop”. For example, a very high quality 1 bedroom apartment at £1,325 less than a mile from Carfax was rejected by one applicant for being too far out of the city (although it then let to an academic who was more than happy with the location). The photo below is a 3 bedroom detached house on one of the best roads in Headington (£1,800), which let in March – thanks to its great location – to a family moving from abroad.
Quality, quality, quality
With more supply and applicants’ stricter criteria it is more important than ever for landlords to ensure their property is of the highest standard in order to achieve the best possible rent. Our North Oxford team listed a brand new development of seven apartments in Kidlington (photo below) at the start of March. The development was acquired by our search and acquisition division, Inspired Investment, and bespoke-designed for the rental market. All apartments were professionally furnished to stand out, and six of them let within three weeks (the majority on the first viewing) thanks to the high standard, good location and correct pricing.
Overall, renewals have been broadly flat year on year, but where there have been new developments in areas of Oxfordshire we have seen a reduction in the number of tenants renewing (for example, our renewals were down 10% year on year in Bicester) and an increase in those surrendering their tenancies – fuelled by the abolition of stamp duty for first time buyers. The new developments continue across the county with more due for completion in 2018 in Chesterton, Bicester and East Oxford, which provide good buy-to-let opportunities.
Don’t rule out second-hand property
Inspired Investment has identified a recent trend of investors searching for property with a tenant in-situ. For example, one client was relocating from abroad to live in tied accommodation in London. With the money from their house sale they wanted to buy an investment property in Oxford. We helped them to acquire a 2 bedroom apartment which was being sold – with the tenant – by an existing client. The new owner is earning rental income from day one and the location is good for capital growth and future resale. If you are interested in similar opportunities call our team on 01865 302314.
Over-quote to win the business continues to trick landlords
In a busier market, the 1 bedroom apartments at the Westgate (photo above) could have achieved rents of around £1,500, however in the current climate we felt £1,350 was a more realistic level. We quickly let three of these apartments at the asking rent (and the tenants have already moved in). A quick look on Rightmove finds similar apartments still sitting on the market with other agents because they were priced too highly.
What has been letting best
Typical for Quarter 1: smaller properties have let well
Upcoming seminar: Letting: do the numbers still stack up?
Join us as our investment and property management experts advise you on setting and achieving your buy-to-let objectives. Mortgage and tax specialists will also go through the numbers, demonstrating that property investment can still be profitable.
Tuesday 29th May, 6.00-7.30pm, Saïd Business School, Oxford
Book your space: firstname.lastname@example.org / 01865 302302