It’s time to fix the buying process to add more rental stock to the market

James Brocklebank is head of buy-to-let marketplace at GetGround

Buy-to-let investing is not the right career choice for the workshy. While it is more often than not hugely rewarding – both in a financial sense and in knowing that you are helping to contribute high quality places to live to people that so desperately need them around the country, it is very often demanding and time intensive.

Given the turbulence in the wider economic market right now, you’d be forgiven for assuming buy-to-let investing might take a dip in popularity. But, the reality is far from it. UK property continues to serve as one of the most dependable, resilient asset classes investors can pick. The demand for rental property among tenants is reaching record highs, creating an enormous runway for buy-to-let investing to continue to grow as an investment sector. According to Zoopla, demand from tenants is up a staggering 43% on last year and the average rental property receives 30 to 40 enquiries.

What’s more, landlords are becoming savvier and more knowledgeable about the best ways to invest. In particular, the proportion of landlords forming limited companies through which they buy property is rising fast. Recent research by Paragon Bank showed the number of landlords aiming to invest through limited companies reached 62% in the second quarter of 2022, up from 50% in the first quarter of the year. At GetGround, the data tallies. We’re now incorporating 2.5 times more property companies on behalf of landlords than just one year ago.

Yet, the actual process of getting started can be arduous. Just buying a property can be tough enough to deter some from even starting out, or others from expanding their portfolios. Those with any experience of buying buy-to-let property know that it is a convoluted, archaic process made up of many disconnected parts. It costs too much, takes too much time and comes with too high risk of failure.

Research commissioned by GetGround in the late summer sets out these problems in a stark light. In a survey of several hundred property buyers, 77% of landlords told us that the process of buying a property decreases their appetite to buy. Four in five of them (78%) reported that at least one of their buy-to-let transactions has fallen through and almost every single one (95%) said the cost of buying investment property has increased in the last 12 months.

This is a system that needs to improve. As it stands, it’s a failing process that’s hurting not just landlords and investors but the millions of people who rely on our private rented sector to be healthy, buoyant and active.

For 88% of landlords surveyed, reducing the time taken to complete a purchase is key to improving the buying process. 71% called for better ways to source good property and the same proportion (71%) believed lowering transaction costs can make the process better.

We’re working to make many of the experiences around buy-to-let better – driving efficiencies for landlords wherever we can. It’s unsurprising therefore that the problems facing landlords at stage one of the investment process – the sheer fact of acquiring the property in the first place – have preoccupied us for a while. We’ve subsequently launched GetProperty, an all-in-one investment service that, in collaboration with our network of 1,300 property industry partners nationwide, aims to provide peace of mind to new or experienced landlords, whether UK based or international, when it comes to getting started or building out their portfolios.

Now, more than ever perhaps, it’s essential that we find more ways to encourage the landlord market to keep expanding. While Zoopla tells us that rental demand is surging, the platform also says that rental stock is down by a quarter year-on-year. Layer on top the challenges of high inflation, a cost of living crisis and a potential recession, and finding ways to supply more good value, good quality, professionally run rental property is essential. Whether it’s providing education, cultivating confidence to invest, or synchronising the various pieces and parties in the buying process, there have to be better ways to make the experience run more smoothly.

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