Zoopla’s boss predicts a shift to corporate landlords for the PRS

Zoopla’s boss predicts a shift to corporate landlords for the PRS

0:01 AM, 31st July 2024, About 4 months ago 36

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The boss of property listings website Zoopla, Charlie Bryant, says that being a private landlord is no longer financially viable – and corporate landlords will move into the market.

Speaking to the Telegraph, Mr Bryant, who leads Zoopla’s parent company Houseful, highlighted that individual buy to let investors are retreating from the private rented sector (PRS).

He points to rising taxes, high mortgage rates and increased regulation for the exodus.

However, in their place he is predicting that pension funds and private equity firms will replace private landlords, capitalising on the profitable build-to-rent (BTR) sector.

He notes that the removal of tax relief on BTL mortgages and the 3% stamp duty surcharge on second homes, introduced in 2016, have significantly impacted the attractiveness of being a landlord.

‘More corporate institutional landlords’

Mr Bryant told the Telegraph: “Undoubtedly the next iteration [of the rental market] is, particularly with potential planning changes, will be larger, more corporate institutional landlords, under the build-to-rent guise.”

Data from UK Finance supports his view, showing a contraction in the buy to let mortgage sector for the first time since 1996.

This trend coincides with Labour’s plans under Sir Keir Starmer to overhaul planning rules and build 1.5 million homes, potentially favouring corporate BTR investors.

The build-to-rent model, which is already prevalent in the US and Germany, is rapidly expanding in the UK.

According to JLL property consultants, the number of BTR flats in Britain has surged from 7,200 in 2015 to more than 90,000 today, with another 90,000 in development.

Despite this growth, these figures are still small compared to the 4.6 million households in the private rental sector.

Build-to-rent will be integral

Various property experts believe that build-to-rent will be integral to Labour’s housing strategy of building 1.5 million homes in the next five years, especially as high immigration levels drive rental demand.

Mr Bryant said: “Net migration remains high. The UK remains a very, very popular destination for overseas students and migrant labour.

“We are still a very strong financial centre and therefore we get a lot of expats coming in.”

To address the increasing demand, Mr Bryant is urging the government to construct a variety of homes, including social and affordable rent.


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Badgers tusk

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21:19 PM, 6th September 2024, About 3 months ago

Reply to the comment left by JB at 31/07/2024 - 10:47
I’d say have 4-6 all paid off or low LTV. Depending on area will give you around 3-6k a month and well manageable where you can give good service. Any large scale landlords with high debts and large LTV’s really haven’t “invested ” any money and because of this won’t show much or any return in my opinion. Pay the mortgages down to below 25% loan to value and you will see a return on your money invested.

Beaver

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10:50 AM, 9th September 2024, About 3 months ago

Reply to the comment left by Badgers tusk at 06/09/2024 - 21:19
Not sure I agree with 'landlords who are invested at high LTV aren't invested'.

Clearly if you are invested at 60-80% LTV then you are invested because you own 20-40% of the property. And if you are in this situation then rising interest rates and not being able to offset those interest rates against rates will affect you more than if you own 75% of the property.

GlanACC

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11:06 AM, 9th September 2024, About 3 months ago

I would say you need at least 4 properties if you have mortgages as you only need one bad paying tenant to scupper you. I originally had 18 properties and a £1.8m loan. I had 3 bad paying tenants but I could still easily pay the mortgage. Safety in numbers if you can sleep at night.

Beaver

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11:44 AM, 9th September 2024, About 3 months ago

Reply to the comment left by GlanACC at 09/09/2024 - 11:06
So what was the average LTV when you had 18 properties (apologies if it's rude to ask).

GlanACC

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12:32 PM, 9th September 2024, About 3 months ago

Reply to the comment left by Beaver at 09/09/2024 - 11:44
I had a mix of 5 years and 10 year mortgages, and the average was around 6% (LTD company mortgage) at around 75% to 85% LTV. Loans were easy to get then. I remember remortgaging all my properties in one go and got £850k in one tranch, immediately went out and bought another 6 properties in the space of 2 weeks (houses were reasonably prices then too)

Beaver

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12:40 PM, 9th September 2024, About 3 months ago

Reply to the comment left by GlanACC at 09/09/2024 - 12:32
I’m guessing that owning 15-25% of the properties you considered yourself to be ‘invested in them.’

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