My inbox is being regularly filled almost daily with commentary from legal analysts, in particular about the ongoing progress through parliament of the Renters Rights Bill, which according to some is a subject that many landlords are still blissfully unaware about. The Bill has been widely commentated about in the wider media in the last six or so months since the recent General Election.
Prior to that the Bill was renamed from its previous entity known as the Renters Reform Bill by the previous Conservative government. As such I find the apparent lack of awareness by a large number of the 2.5 million landlords staggering, despite many people no longer engaging with the traditional media channels.
Like it or not, the Bill is likely to become law by this summer and there will inevitably be consequences to deal with for landlords, letting agents and of course for the renters/tenants. The Bill will very likely result in more costs for landlords from increasing compliance being passed on, mostly to be paid by tenants, given that demand to rent is rising and that supply is stagnating as some older landlords continue to exit the market. As we once again point out in our lead article on page 15, the much vaunted Build to Rent sector is also seeing a sharp reduction in future new supply across the UK.
Many property investors have adopted a wait and see approach, with some selling lower yield rental stock to either invest in more favourable locations where rental demand trends look more positive, or into strategies such as commercial property.
As we point out in an article on page 18, for a number of reasons making short term profits from residential property is often a risky business and my own view is that it’s primarily to be viewed as a long-term gain.
Those who have been following our quarterly PIN Fund results this month on page 20 will note that the last quarter has seen some very poor performance. This might alarm some newer readers, but when one looks at the overall performance within the sector we highlight, all barring one of the companies has produced double-digit annual returns over ten or more years. One entrant in Safestore that we brought into our fictional fund is still showing a 27.1% annual ROI since entering the PIN Fund in autumn 2016.
Should you be investing more than 10% of your personal wealth in stocks and shares? Probably not, but in these trickier and uncertain times that we are currently in for now in the UK economy, not having ‘all of ones eggs in a basket’ is a sound approach which over time should serve you well.
