Landlords who own buy-to-let properties in the UK are now able to earn better returns on their portfolios, thanks to a fall in void periods they face, according to a new report that has been released by Paragon Mortgages.
Void periods are a serious negative for landlords, because these times when they have no tenant in their home will mean no income, and for some it can even mean having to find other ways to pay the mortgage on their rental home.
However, Paragon Mortgages said that it is a factor that is becoming less and less of a problem, with void periods on a downward trends that are taking them towards an historic low.
Its report said that the average void period now faced by owners has fallen as low as 2.7 weeks. It is the lowest this figure has fallen to since 2012, and in a market where more people are buying homes, it shows a real strength for the rental market and the demand therein.
It is this high demand that has been credited with keeping the period between tenants living in a property so low at the current time, and takes it towards the bottom of the average seen over the last few years.
On average, void periods have sat somewhere between 2.6 and three weeks for the past 12 years, with the only exception to this rule being between 2009 and 2010, when the figure leapt to 3.5 weeks as demand waned.
And the 2.7 weeks currently being enjoyed by landlords is only marginally higher than the 2.5 weeks that was witnessed in the fourth quarter of 2002, an historic low.
“What we have seen over the last 12 months is a downward trend in average void periods reported by landlords. This is encouraging as it means properties are being let quicker, which is better for landlords and better for prospective tenants,” said John Heron, managing director of Paragon Mortgages.
He said that as well as demand, it shows that investors and tenants alike are now managing tenancies very well, which has meant that the average void period has fallen, with far less hurdles and problems getting in the way of the process.