I'm a property expert: Here's why one fifth of our landlords have sold up

Property is a favourite British conversation topic. Nearly everyone has an opinion on where house prices are heading, the next property hotspot or where homes should - and shouldn't - be built.

But to get a true sense of what's driving the market, it is worth listening to the people who live and breathe property day in, day out.

In this series, we put an expert through their paces each month.

We want to know their view on all of the hot-button topics mentioned above as well as mortgage rates, buy-to-let and housebuilding.

This month we spoke to buying agent Jo Eccles, founder and managing director at Eccord, a property search and management company specialising in central London.

Eccles' team represents individuals and families buying properties for themselves or as an investment, as well as managing portfolios for buy-to-let landlords.

Eccles, has been described as a 'superstar woman in property' and is recognised in the Spear’s 500 as one of the UK’s top 10 property advisors.

I expect average house prices to stay largely flat over the next 12 months, but there are certain locations and sectors of the market that will outperform.

Turnkey properties are a good example. People are still very reluctant to do renovation and refurbishment work due to the timescales and costs, which is creating a two-tier market where pristine turnkey properties are being snapped up quickly for a premium, whilst those needing work are sticking.

Looking back over the last decade, which has seen Brexit, covid, a war in Europe and an inflation crisis, it's impossible to predict with confidence how the market will perform over a 10-year timeframe.

Previously you could buy an average property in a good location and ride the house price growth wave, but the market today is much less forgiving.

Buyers today need to be strategic about internal proportions, location and future marketability.

My advice would be to buy a better property one step further out from where you want to be, rather than an average property one step further in.

Rates have fallen more slowly than many people hoped, but we're seeing many buyers who have held out for bigger cuts in borrowing costs now making the decision to press ahead, as life goes on and they adjust to the 'new normal' of higher rates.

We might see rates edge down a bit further in the next 12 months but major changes in either direction are unlikely, unless there is a renewed bout of inflation which would create upward pressure.

I expect the lowest fixed rate deals will probably settle at around 3.5 per cent this time next year.

I was fortunate to secure a five-year fixed rate deal at 1.2 per cent back in 2021, just before rates started going up.

I was confident at the time that it was very competitive and rates were unlikely to go any lower.

In hindsight, my only regret is that I didn't take a 10-year fixed at a slightly higher rate, which was also an option available to me at the time.

At the moment it's looking very unlikely. The planning system is incredibly slow, construction costs are up almost 30 per cent and first time buyers are being held back by affordability constraints.

Private developers will only build what they can sell at a decent profit margin, and if they can't be confident of that, they will sit on land until they are.

The continuous flow of landlords exiting the private rental sector is really concerning.

Our in-house property management team rents out and manages approximately 150 properties across prime central London and nearly one fifth of our landlords have sold up - or tried to - in the last three years, because of rising costs and increasingly onerous regulation.

Approximately one third of people in the UK rent. Institutional landlords tend to focus on larger scale property projects such as build-to-rent, but we need a wide variety of rental homes and private landlords play a big role in providing that. So it's really important they remain in the market.

Unemployment is rising and could soon hit 5 per cent, which would certainly undermine consumer confidence and affordability.

When people are worried about their jobs they tend to hunker down and avoid major financial decisions, such as moving home or taking on a larger mortgage.

Sentiment and confidence play a big role and recent speculation about annual property taxes and capital gains on the sale of primary homes over a certain price point has added uncertainty, so all eyes are on November's Budget to see what will be announced.

Landlords are facing higher costs on multiple fronts, from higher mortgage rates, taxes and service charges, to rising labour and costs for repairs.

Tenants have also become more demanding - with more working from home, they have even higher expectations of the condition of the property and response times.

At the same time, the regulatory pressure on landlords has become much more complex and many no longer feel comfortable managing their properties themselves, so they are switching to professional property management to ensure they comply and stay on the right side of the rules.

This has all had a major impact on landlords' net returns and they certainly feel they're being unfairly targeted.

We're seeing many really conscientious landlords selling up as a result, which is bad news for tenants.

Net yields in London are around 1 to 1.5 per cent, which isn't even enough to cover costs in many cases.

Landlords also face a high level of risk, in terms of void periods and rising cases of tenants refusing to pay or causing damage to the property.

Considering investors can earn over 4.5 per cent net yield on a low-risk government bond, it's easy to see why landlords are questioning their long-term commitment to buy to let.

Having said that, the tangibility of bricks and mortar holds a certain appeal. For example, a lot of our clients in the music and media world invest their money in property because it's an asset class they feel comfortable with.

In my opinion, locations which are overseen by large and well-respected institutional freeholders or developers are great places to invest, as the location and its long-term prosperity are essentially financially underwritten.

For example in London, the Howard de Walden estate completely transformed Marylebone by curating which retailers and restaurants it allowed to feature on the high street, undertaking significant landscaping and planting in the area and so on.

Prices have risen, and continue to rise, as a result of their ongoing investment and safeguarding of the area.

We've seen other success stories such as the Cadogan Estate's investment into Sloane Square and the King's Road in Chelsea and the transformation of Covent Garden by CapCo's long term commitment.

Many young people are now seriously questioning the cost and benefit of a university degree, because of rising tuition and accommodation costs and the growing appeal of alternatives such as apprenticeships.

I would therefore be mindful about the long-term growth potential of big university cities where the local property markets rely heavily on student demand.

Some of the best properties we've bought for clients over the years have been new builds, but they've had a lot of bad press and there are risk factors which need careful consideration such as oversupply, cladding and rising service charges.

Many of our clients are becoming increasingly conscious of amenities in new developments, such as pools and gyms, which push up monthly costs - especially if they don't plan to use them regularly.

Period properties can offer a rarity factor and first floor apartments are often the best ones to go for, as they tend to have high ceilings, lots of light and the security or privacy benefit of not being on the ground floor.

London is made of multiple micro-markets, each with its own unique mix of property types, price drivers and buyer demographics, so it's a mistake to treat it as one entity and only consider average city-wide house price growth.

Whilst it's true that a lot of wealthy people have left the UK since the non-dom rules changed, others continue to arrive.

Nearly a third of our clients - the highest it's ever been - are Americans moving here, attracted by the London lifestyle, our excellent schools, culture, lack of guns and connectivity to Europe.

We're also seeing an influx of expats returning to London when their children reach school age, and entrepreneurs moving here to set up their next venture.

An investor visa for highly skilled, entrepreneurial new residents to come to London and contribute to the growth of our economy would be very helpful, but there isn't one currently.

Rather than just adding housing to already overstretched areas, I would be much bolder in backing better transport links to make more areas viable for first-time buyers, reducing pressure on London and the South East which aren't affordable to many people.

Understanding of the seller's motivation and mindset is key when negotiating, as it's not just price they're looking for.

Many sellers are fatigued, or they might be in a chain and don't want to risk their sale falling through or the stress of a buyer chipping the price at the last minute.

So credibility and ensuring you're the standout buyer is essential for securing a lower price or out-competing another buyer who is in a stronger position than you.

The relationship you build with the selling agent and how you present yourself is critical to this.

There are various ways to achieve this – for example, rather than just confirming the amount you're offering, explain why you want to buy the property and what you love about it.

We recently secured a property for a client for less than another buyer, as we explained that our client jogged through that neighbourhood specifically every Saturday morning, always dreaming of buying a house there.

It was completely genuine and made the sellers comfortable to accept a lower offer, in the knowledge that they were selling to a buyer who loved the house and wouldn't play games.

With stamp duty and other buying costs so high, we always advise our clients to futureproof their purchase as much as their budget will allow, whether that's having a spare bedroom for a new baby or a lodger, or being in the catchment of a good local school.

Fifteen years ago, people came to us to buy for the here and now, moving up the ladder with each life stage, but now stamp duty forces them to think several steps ahead.

Price bravely and realistically at the outset. There are a surprising number of buyers on the sidelines who are emerging when a price is competitive, so trust that buyers will bid the price up if your property is worth more.

Some estate agents will overvalue your property to win the business - and it can be tempting to go for the highest valuation. However, you will probably end up selling for less than if you priced correctly at the outset - and the whole process will take much longer too.

My husband and I bought our current home in Little Venice, London, back in 2013 before it became established as an area in its own right.

We wanted timeless architecture and high ceilings and bought a traditional white stucco house which had enormous potential but it was laid out as bedsits at the time.

Fortunately construction costs were a lot lower then and we restored it to a single family home and added an extra floor on top.

As well as adding value from our refurbishment, the area has since become much more sought after and it's incredibly well connected, becoming even more so with the opening of the Elizabeth Line at nearby Paddington station.

I don't invest directly in property because my whole business is property-based, so I don't feel I need to increase my exposure.

Before we bought our current house though, we tried to buy a house in Marylebone which was listed, meaning we would have been very limited in what we could change, and the outdoor space was tiny.

The owner decided not to sell in the end so we didn't proceed, and in hindsight I'm grateful as we wouldn't have loved it long term.

Even as a buying agent, when it's your own purchase, it's impossible for your judgement not to be clouded by emotion.

That's why it's so valuable to have a neutral third party acting for you in any property transaction, who can be a completely objective voice of reason.

Since covid in particular, the way we view and buy property has been transformed, from interactive floor plans and virtual reality tours to amazing AI features and chat bots, which help buyers make better decisions, reimagine spaces and so o.

For me, I would find a property tech business I'm passionate about and invest in that.

Borrowers who need a mortgage because their current fixed rate deal is ending, or they are buying a home, should explore their options as soon as possible.

Buy-to-let landlords should also act as soon as they can.

Quick mortgage finder links with This is Money's partner L&C

> Mortgage rates calculator

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What if I need to remortgage?

Borrowers should compare rates, speak to a mortgage broker and be prepared to act.

Homeowners can lock in to a new deal six to nine months in advance, often with no obligation to take it.

Most mortgage deals allow fees to be added to the loan and only be charged when it is taken out. This means borrowers can secure a rate without paying expensive arrangement fees.

Keep in mind that by doing this and not clearing the fee on completion, interest will be paid on the fee amount over the entire term of the loan, so this may not be the best option for everyone.

What if I am buying a home?

Those with home purchases agreed should also aim to secure rates as soon as possible, so they know exactly what their monthly payments will be.

Buyers should avoid overstretching and be aware that house prices may fall, as higher mortgage rates limit people's borrowing ability and buying power.

What about buy-to-let landlords?

Buy-to-let landlords with interest-only mortgages will see a greater jump in monthly costs than homeowners on residential mortgages.

This makes remortgaging in plenty of time essential and our partner L&C can help with buy-to-let mortgages too.

How to compare mortgage costs

The best way to compare mortgage costs and find the right deal for you is to speak to a broker.

This is Money has a long-standing partnership with fee-free broker L&C, to provide you with fee-free expert mortgage advice.

Interested in seeing today’s best mortgage rates? Use This is Money and L&Cs best mortgage rates calculator to show deals matching your home value, mortgage size, term and fixed rate needs.

If you’re ready to find your next mortgage, why not use L&C’s online Mortgage Finder. It will search 1,000’s of deals from more than 90 different lenders to discover the best deal for you.

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Be aware that rates can change quickly, however, and so if you need a mortgage or want to compare rates, speak to L&C as soon as possible, so they can help you find the right mortgage for you.

Mortgage service provided by London & Country Mortgages (L&C), which is authorised and regulated by the Financial Conduct Authority (registered number: 143002). The FCA does not regulate most Buy to Let mortgages. Your home or property may be repossessed if you do not keep up repayments on your mortgage