This year has been a challenging one.
Demand has massively outweighed supply. We have averaged 140 enquiries per property. This is simply unsustainable.
Some landlords have, for one reason or another, decided to sell their portfolios which has meant a decline in available stock, many residents are now looking to secure 12-24 month tenancies so that they have security, which means that stock rotation is down. All-in-all, the number of prospective residents has grown, while the volume of available properties has shrunk.
Cornwall has become the #1 destination for people migrating from around the UK. New industry springing up, the culture of Cornwall, the climate, the beaches and the people have made it the go-to destination for people as they came out of lockdown. This is great for ancillary businesses who benefit from the cash spend by these new people but not so great if they can’t find somewhere to live.
What does this mean for Cornwall in 2022?
New legislation is coming in, which will tighten up procedures within our industry, making everything we do, as an industry, more robust, which is great news for all concerned. At Homequest, we wholeheartedly embrace any changes that weed out those rogue, or lazy, lettings agents because they do the industry, and its reputation, no favours at all.
Stock levels are predicted to be similar to 2021, for the first half of 2022, but it is then predicted that new investors from different sectors will come to the market which will, hopefully, increase stock levels, meaning that there will be more properties for more residents.
With new legislation coming into effect in 2022, we will contacting our clients and our residents to inform them of what they will need to do, well in advance of when the changes need to happen, once again showing our pro-active approach to how we manage our clients properties.
What needs to change?
More available properties. It’s as simple as that. Because of the lack of supply of available properties in 2021, the inevitable surge in rent prices has happened. This is not our doing, don’t blame the agents, it’s market forces. When you get an average of 140 enquiries per property, it is only human that one or two people will offer above the listed rental price to secure the property. Once that happens, similar properties in similar locations then fall into the same price band, therefore nudging them up.
In some cases these increases have been a long time coming. Some properties have held their rental prices for 3-5 years, therefore an increase was always on the cards, but some have been driven by the lack of stock.
We, as reputable lettings agents, would not be following our due diligence if we didn’t propose rent increases at our rent reviews with our clients. Some have agreed, some have asked for a smaller increase and some have said NO and asked that the rent remains static for the next rental period.
However, with increased rental values comes increased Return On Investment (ROI) for investors. It is this increase in the ROI that makes becoming a professional landlord in Cornwall an attractive proposition. If you are a professional landlord in, let’s say, The Home Counties, your ROI is probably around 3.5% to 4.5%, while here in Cornwall it is now nudging 5%, with some of the larger properties achieving around 5.5%-6%.
Leading industry figures predict that serial property investors will be moving away from low ROI areas and focussing on areas in England and Wales that give them a better return. If this happens, it could be a welcome boost for prospective residents looking for a long-term rental home.
How can 2022 help you?
Over the past 18 months, Homequest has acquired a number of new clients who have moved away from their existing agents. Their reasons for changing agents have been varied from a lack of communication, a poor service or
a general malaise. Our reputation for delivering a high-grade service to both our clients and our residents means we attract landlords who demand a level of service that is commensurate with the fees they are charged.
With the incoming legislation, more landlords will demand a better service from their agents and when that is not forthcoming they will change. Moving across to Homequest, or our sister company, Camel Lettings, is seamless and those landlords who have joined either company have seen an instant upgrade in the service they receive.
If you are a landlord and you’re assessing what to do in 2022, please talk to our teams at Homequest and Camel.
Have a great end to 2021, enjoy Christmas and The New Year and, if we don’t know you now, hopefully we will come to know you in 2022.
