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A New Approach to The Buy-to-Let Market in London

Posted 20 June 2018 by Keith Osborne

WhatHouse? speaks to Trevor Stunden to find out more about his company and what they offer to landlords and tenants...

We speak exclusively to Trevor Stunden of Residently on the services the company provides in today’s rental market, which is still an important sector for many buyers of new homes who are looking for long-term investment rather than a place to live.

Please tell us a little about yourself and Residently.

We were founded out of a need to reduce the frustration residents experienced while renting in major cities such as London. When we moved to London as residents we resigned ourselves to the idea that this was just the way the rental market worked. But once we became landlords and realised the experience was just as challenging on the other side of the coin, we knew there had to be a better way, and thus Residently was born. Founded by a team of technology entrepreneurs and property specialists, we have set out to change the way residents live by providing a Home as a Service.

Why are we building an innovative rental brand? Because we believe that both residents and landlords deserve a better experience than what they currently get from the status quo.  We do not believe this is a zero-sum game. We have proven that we can provide a friction-free experience with predictable income for the landlord, whilst also delighting our residents with amazing customer service, a technology driven experience and loads of great extras. We want to provide our residents with the high level of service they have come to expect from other sectors and their subsequent disruptive brands such as Deliveroo, Airbnb and Spotify. There are thousands of online and mobile brands fighting for our attention in every sector, yet somehow property has been left behind. Residently is a rental brand, underpinned by technology, changing the way residents experience renting and landlords manage their investments.

Dealing with rental property, what sort of services and options would you offer a buy-to-let property owner?

For landlords, the process of letting out a prized asset can be risky, costly and stressful. We believe we are able to eliminate these issues for all parties involved and create more value by offering a much better experience. For landlords, Residently delivers solutions via three strands. By letting to Residently as a long-term tenant, landlords are provided with guaranteed, predictable income for up to five years, eliminating vacant periods for substantial lengths of time. This strategy de-risks the asset for many investors. Secondly, landlords no longer have to find and manage tenants, as all tenants become residents within Residently’s network and managed in-house. Thirdly, Residently provides peace of mind that their ability to attract and verify reliable and reputable residents is aligned with the landlord’s goals.

Have tax and stamp duty changes in recent years had a major effect on buy-to-let?

It’s well publicised how the changes on interest relief, stamp duty and tougher lending regulations have reversed the growth trend of buy-to-let properties. For us, the biggest growth we see is in larger institutional investors coming in and building both small and large Build to Rent schemes. Most of the large-scale activity seems to be happening on the peripheries on the city, but there are some developers who put the shovel in the ground prior to 2016 with the intention of selling and have now restructured their financing to support a Build to Rent scheme as the sales market softens. I think the government’s intention of opening up more stock to first-time homebuyers has actually just shifted the stock away from individual buy-to-let landlords and into the hands of larger institutions. As the experience generation makes a conscious decision not to own, this will become a more and more interesting part of the investment opportunity for landlords within the city.

Is new build a significant part of the rental market, and should investors and potential investors see pros and cons in choosing new build?

Residently properties are new or newly refurbished properties. We have taken the decision to work with landlords with this type of stock as it is the level of standard our residents are expecting. Along with the increased level of service expectation, residents are looking for good value when it comes to the properties they are renting. They want clean, bright, well-finished properties with good storage space that won’t give them hassle while they are living there. We advise all investors that approach us with an interest in buying property which they could let to us that new builds will remove a significant amount of unknown costs as well as make their properties more desirable. Residents are willing to pay a slight premium for new builds or recently refurbished. That being said, investors need to make sure they are buying a property which has a functional layout and is good value for money. Just because something is new, doesn’t mean it will be well-received.

Even if the finances work, are there aspects of the rental market that potential buy-to-let investors might be unhappy with?

As with any investment asset, there will always be a level of risk/reward that needs to be considered before becoming a landlord. Depending on where you are buying, certain markets are becoming more and more competitive and putting pressure on independent landlords. Residents are looking for additional value, just like the rest of the service-based companies are providing within other areas of their lives.

Rightfully so, the quality of property is continually going up which will entice landlords to keep their properties maintained to a higher specification than what has been historically done. This includes regular redecoration or refits, as well as extended services such as inclusive bills and excellent customer service that becomes harder and harder for individual buy-to-let landlords to provide. This is where Residently can support. By having a rental brand, Residently are able to support smaller (or larger) landlords with extras that they would not normally offer their residents. This provides a point of differentiation for their property and helps increase the value and reduce churn.

Individual buy-to-let landlords need to be diligent and properly vet the people who they let into their properties in order to reduce potential damage or delinquency. There are numerous scams out there that target individual buy-to-let landlords that cause a lot of problems and cost a lot of money when trying to remove a delinquent tenant. 

Are there simple rules that landlords should insist upon to make their rental as smooth as possible?

In order to work best with Residently, it’s ideal to have all the operational details of your property in one place. We do a property on-boarding with all our landlords right at the start and we find that a lot of them don’t realise the importance of having all the information about their appliances, boiler, utilities and refuge details available in one spot. Keeping track of this will help reduce on-boarding time and remove any stress of trying to find them once asked. Once that’s all done, sit back, relax and let Residently take care of the rest.

What hotspots are you finding in the property market right now and how do you see the market performing over the next 12 months?

Residently is currently only live in London Zones 1 and 2. As such, we really like areas such as Dalston, Bermondsey and Camden. That’s not to say we don’t like Marylebone and Notting Hill, we do and have properties in these areas, but we see the biggest growth opportunities in these more up-and-coming areas. The Office of National Statistics reported in March that London rental prices on average grew by 0.1% in the last 12 months. Much of the growth can be attributed to less traditional areas, while we’ve seen declines in more classic areas such as Chelsea, South Ken and Notting Hill. 

I think the uncertainty of Brexit will continue to loom over the market, but for us as a business, that doesn’t bother us at all. We believe London is an international city which will always have a strong rental demand from discerning and service oriented residents who are going to be expecting more and more from this part of their spend.


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