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How to Limit Buy-to-Let Void Periods in 2024

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    How Can Investors Limit Void Periods on Their Buy-to-Let Property?

    Void periods occur when a rental property sits empty, resulting in no rental income for the landlord. Generally, avoiding these periods is crucial for property rental success.

    However, void periods are inevitable to some extent despite efforts to prevent them. Nonetheless, their impact can be minimised by taking proactive measures to avoid short-term voids from becoming prolonged vacancies.

    While the last two years led to a subdued property market, 2024 has shown signs of growth, with buyer activity increasing and a more optimistic outlook regarding interest rates and inflation.

    If you are set to resume your investment strategy but want to limit those avoidable buy-to-let costs like void periods, read on for more information.

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      Purchase Property in In-Demand Areas

      Most studies agree that UK property investors should look to in-demand areas to find properties that are less likely to experience prolonged void periods.

      So, how do you identify in-demand areas?

      Firstly, investors should look to areas close to public transport networks and good local amenities. These areas should also have good job prospects. For that reason, investors may want to consider city centre accommodation, such as Liverpool, which has the fastest-growing economy out of any other major UK city.

      In addition, Liverpool has a strong graduate retention rate and regenerative prospects, which enhances the local job market.

      Shawbrook Bank conducted a study last year that showed that more than a quarter of landlords see city centre accommodation as a lucrative investment, catering to tenants who want to be close to work and reduce their commuting time.

      Learn More: Discover the best place to invest in property and explore buy-to-let properties for sale in Liverpool today!

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      Rental Yield

      Choose Areas with Competitive Rents but Good Yields

      Investors also need to consider the rental costs associated with their property. As landlords move away from London to grow their property portfolios in cheaper locations, renters are also looking for more affordable accommodation.

      With the cost of living elevated, renters look to cities like Liverpool, where there are plenty of things to do while still enjoying relatively inexpensive rental costs.

      While low rent may not be high on the list of priorities for the discerning buy-to-let investor, Liverpool’s property prices are considerably lower than the national average. According to HM Land Registry, the average Liverpool property price is £176 – more than £100,000 cheaper than the UK average.

      In addition, Liverpool ranks highly on Zoopla’s list of the best-yielding cities and towns, offering an average yield of 7.44% – almost 2% higher than the national average.

      Further Reading: Looking for the best way to invest £50k in property? Get a complete overview of the latest market trends with our daily buy-to-let insights!

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        Invest in Energy-Efficient Properties

        Investors may also want to choose buy-to-let properties with good EPC ratings and energy-efficient features to limit void periods.

        Research shows that many tenants prioritise energy efficiency to keep their costs low. If tenants live in a property that helps them keep their living costs down, they’re less likely to look for somewhere else to live. In addition, a good EPC rating will make your property more desirable to prospective tenants, so you may avoid lengthy periods looking for somebody to occupy your home.

        A separate study from The Mortgage Lender shows that 25% of landlords consider energy efficiency over many factors, highlighting the importance of a good EPC rating.

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        Diversify Your Portfolio

        In some cases, void periods are unavoidable. However, spreading your investments across multiple properties in high-yielding locations can help mitigate those void periods and reduce risk.

        There are many other benefits to diversifying your property investment portfolio.

        For instance, a diversified portfolio generates stable rental income consistently. Various markets and property types offer different growth potentials, increasing the chances of capital appreciation. With plenty of research, investors can identify these areas and alter their investment strategy accordingly. In addition, a well-diversified portfolio helps you adjust more quickly to market changes and economic conditions.

        Take a look at some of our recent buy-to-let area guides for more information on UK property investment:

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        Author

        Dale Barham

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        Dale is a property news and onsite content writer at RWinvest.

        Landlord News, UK