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CHALLENGES AHEAD, BUT NOTTINGHAM’S RENTAL SECTOR LOOKS STRONG’

Paul Staley, from Chilwell-based property experts SDL Group, takes stock of Nottingham’s private rental market, including what lies ahead for the coming year.

Nottingham City Council has just sent out the clearest signal yet that it wants to clamp down on unscrupulous landlords, who deliver poor quality housing to tenants. With the authority agreeing the Selective Licensing scheme, and submitting it to the Secretary of State for final approval, landlords may soon have to obtain a licence to show their properties are safe and fit-for-purpose.

The move is already proving controversial among lettings agents, who believe landlords will be driven out of the city. At a cost of between £400 and £655 per property, the licence could be a barrier for anyone looking to profit from a handful of buy-to-lets, especially when you take existing housing regulations into account.

Property developers and institutional landlords, on the other hand, generally have the cash reserves to absorb these charges – though with more homes in their portfolio, the costs can soon rise. If they are substantial, it might be enough to push these investors over the border into neighbouring cities and counties.

Selective Licensing comes on top of a raft of new controls being introduced by the UK government this year, designed to protect tenants. Along with ensuring properties meet minimum energy-efficient standards, landlords are also bracing themselves for the outcome of a government consultation on whether to ban letting fees.

That said, and even with Brexit on the horizon, I believe the rental market in Nottingham will remain strong, bolstered by continued investment in build-to-rent (B2R) schemes.

As the government looks to increase home ownership rates, through incentives such as Help to Buy, the public attitude to renting appears to be shifting.

Of course, many people want to get a foot on the property ladder, but there are also plenty of professionals and families in their late 20s, 30s and older who are in no hurry to buy.

Remember, this is the generation who is willing to lease a car, rent a phone and stream their music and films – it’s no surprise they want to live in flexible accommodation that allows them to move when their circumstances change. Increasingly, they want high-spec housing that nobody has lived in before, and B2R is meeting this demand.

 t’s one of the reasons why bigger landlords, working with property management companies, can deliver the quality of service now expected. Transparency is key, and with their limited resources, it’s difficult to imagine small-scale landlords being able to create a robust system for tenants to book maintenance work, make a complaint or view safety records.

Renters are also benefitting from incentives like zero-deposits on properties, like the aptly names Zero Deposit Scheme (ZDS) led by ex-Zoopla chief Jon Notley, which means landlords only later claim for any damage incurred. It’s another sign that the rental sector is modernising, speeding up the moving process and helping guarantee landlords an income.

 As a group, we’ve seen huge success in the North West and are hoping to replicate this success in Nottingham and the wider East Midlands. With investors keen to put their money here, and demand for rental property high, I have every confidence that B2R will be an asset to both the city and county in the coming year.

For more details on SDL Group visit sdlgroup.co.uk.

 


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