LANDLORDS AND ‘SEX IN THE CITY’
Many landlords were lured over the past 5 years by the marketing campaigns of the house builders and property developers into parting with their hard earned cash and investing in new residential apartments within our city centres.
But how much of this decision making was based on investment principles and how much related to more primeval urges? My view is that much of the phenomenon was all about ‘sex in the city’. What do I mean by this?
Developers and marketing men & women know that sex sells.
Where do professional landlords go for their buy-to-let insurance?
House builders marketing campaigns have been historically pretty bland. It’s very difficult to differentiate one 4 bedroom house from another. One famous campaign by Barratts in the 80’s featured a helicopter; WOW, that was about as exciting as it got.
The arrival of the: warehouse conversion & loft apartment, the city centre pad, the penthouse, the crash pad, presented the marketeers with a whole range of new options. Marketing campaigns weren’t restricted to selling bricks and mortar; they could sell these apartments as part of a whole new urban lifestyle. No longer was it about buying a flat with a couple of bedrooms, kitchen and lounge. It was about buying into a lifestyle with instant accessibility: to shops, work, partying and dare I say it the promise of sex.
Developers crammed their apartments with gadgets and stylish appliances for the design conscious ‘metrosexual’ occupiers: Philip Stark taps, Hansgrohe bathroom fittings, Neff ovens. All were meant to showcase the taste and sophistication of their occupiers. In our increasingly style conscience world this served to enhance the attractiveness of the occupier to a potential mate.
What does Rigsby think of Philip Stark taps?
These apartments located within the heart of our cities; near bars and restaurants promised a perpetual party for the lucky occupiers. The heady cocktail of bars and good times and their proximity at the end of the evening promised even more good times. This image was pushed mercilessly by developers and their marketing people.
Landlords were not immune to the ‘sex in the city marketing’. The youthful occupants and recruits to this dream would provide a never ending source of tenants to these new designer palaces.
For landlords, sex in the city was a slightly different animal to that of their youthful tenants. They were sold the concept that they were no longer just a landlord; they could be a ‘property investor’.
Overnight their persona would be transformed from a regular work a day Joe; to a sharp suited property investor. In a matter of a few short years they would be propelled from living a life of waged drudgery to that of international millionaire playboy or playgirl. Companies such as Inside Track traded and preyed mercilessly on potential landlords and investors who were drawn to this enticing dream. The property portfolio; the fast car, the yacht and of course the scores of women or the perfect man that would surely follow.
The party train ‘crunches’ to a halt
Suddenly the ‘credit crunch’, the subsequent credit squeeze and the mirage of instant investment riches melted away in the light of the commercial reality.
Landlords and investors and tenants are left with the fact that these designer palaces are just places to invest in, rent out and live. The realities of cashflow, service charges, voids periods suddenly dawned on many landlords who had ignored the basic principles of property investing.
The death nail of the dream
The death nail of the ‘sex in the city’ dream was probably signalled last week with the announcement that Britain’s social housing industry represented by the National Housing Federation (NHF), the umbrella body for the UK’s housing associations is attempting to get Government support to buy thousand of city centre apartments from struggling housebuilders. These apartments which are even now being marketed by developers as palaces of fun, could very soon become social housing for the masses; not the exclusive, luxury citadels that they were intended to be.
Like all good parties this one has come to an end and; developers, tenants and landlords are now just left with an almighty hangover.
Landlords – find out who the new neighbours could be…..is this what you expected?
Is it the right time?
Now the ‘sex in the city’ mirage is clearing, prices of new apartments are selling at auction at a fraction of their original sale price.
Over the coming weeks Property Hawk will be asking the question. Is it the right time to step back into the city centre property market?
What should landlords pay and where should they be buying?