The head of an investment platform says the changing rental market means landlords should look to long-term gains, not quick yields.
Caroline Marshall-Roberts, chief executive of BuyAssociation, says easing rental demand and a return to house buying are pushing the lettings market into a new phase.
This should make investors move away from volume-driven strategies and focus on long-term value instead.
“Cheaper borrowing costs are an obvious positive for investors, but the benefits extend beyond headline rates” she says.
“Greater stability is returning to the market. Buyers have more choice, price growth has cooled, and the sense of constant pressure that defined the rental sector is beginning to ease.
“What we are seeing is not a collapse in demand, but a rebalancing.
“Rental demand is never evenly distributed, and averages across the UK often mask what is happening on the ground.
“Each town, city, and neighbourhood functions as its own micro-market, shaped by local jobs, transport, demographics, and housing supply.
“For example, private rents have been rising fastest in the North East, North West, Yorkshire and the Humber, and the Midlands, consistently outpacing London and much of the South.”
Marshall-Roberts says that in recent years, almost any rental property could perform well, simply because demand was so intense.
That is no longer guaranteed. The focus now is on quality, durability, and long-term appeal.
She continues: “Properties that cater to stable, long-term renters are key. Family homes close to good schools, transport links, and employment hubs continue to attract consistent demand.
“In addition, well-designed apartments in cities with strong professional populations remain resilient, even as some renters transition into buying.
“Differentiation also matters more than it did before. Energy efficiency, outdoor space, flexible living arrangements, and modern finishes are no longer optional extras. In a market where tenants have more choice, properties that meet higher expectations will enjoy shorter voids and steadier income.
“Location still remains important, but with a sharper lens. Areas underpinned by structural demand rather than short-term trends are likely to outperform.
“University cities, healthcare and life sciences clusters, and places with diverse employment bases offer a level of insulation against shifts in buyer behaviour.”
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This article is taken from Landlord Today