Dress up to stand out from the crowd
Written by Andrew Clark, MD at furnishing solutions provider David Phillips, www.davidphillips.com
As the housing market landscape looks set to change we have started to think about what this could this mean for the rental market. According to the NHBC, new home registrations in the UK rose by 25 per cent in the year to August and are now the highest they’ve been for six years.
In total 90,730 new homes were registered in the first eight months of 2013. Although this is still well below the 140,984 registrations recorded between January and August 2007, the signs point to a sustained recovery in volumes. And this at a time when the government is launching its Help to Buy mortgage guarantees to help people onto the housing ladder.
So – what does this mean for the rental market? In recent years, the shortage of housing stock coupled with the fact that it has been so difficult for people to get onto the housing ladder has massively increased competition for rental accommodation. If more homes are being built and more people become homeowners, this could mean that tenants won’t have to fight over every half-decent property that becomes available. And if the balance of power does shift, landlords will need to up their game.
If tenants do end up having more choice, those investing in property will need to do more to make their investment stand out from the crowd or face the prospect of longer voids. Far from putting in a state of the art kitchen or bathroom which won’t necessarily add any value to the property, and is a significant capital investment, we believe this can be achieved by furnishing the property to the tastes of your target market. Stats, which we recently compiled for an investor client, showed that of a sample of the 388 properties we have furnished in the last two months for which data exists, took on average nearly 20 days less to let than typical unfurnished properties in London.
More than 60 per cent of the private rented sector is furnished and in London it is much higher at around 80-90 per cent. So – if you decide to go down the furnished route, we advise you to make sure that it is furnished appropriately for your target market. Demand varies significantly in different parts of the country and sectors of the market. If you get it wrong, it could seriously narrow your letting market and increase the risk of longer voids. You could also end up paying an unnecessary amount on furniture when you needn’t have. Since the buy-to-let explosion of the late nineties a number of furnishing solution providers like us have emerged to take this off your hands. Landlords can benefit from an in-house team of property experts and interior designers who have done a considerable amount of research to help them get it right. Indeed, we’ve furnished the buy-to-let sector for over 15 years so we know what tenants in their target market expect and how to pitch their investment to them.
So – if you are a landlord think about what will best help your investment to stand out from the crowd. With more homes being built and more choice, surely it’s time to ditch the old routine and dress up to woo tenants.
Andrew Clark is managing director of David Phillips, a company that provides furnishing solutions to private landlords. Their service includes Next Day Replenishment Furniture and Appliances, Furniture Packages, Interior Design, Contract Furniture, and Rental Furniture.
