Lettings agency enjoys soaring profits and forecasts growth of rented homes market

Dorian Gonsalves, managing director of Belvoir.

Dorian Gonsalves, managing director of Belvoir.

  • Group revenue up 19% to £6.9m
  • Profit before tax up 25% to £2.2m
  • Managed properties up from 30,000 to 37,000

Leading east of England lettings agency Belvoir Lettings saw its pre-tax profits soar by 25 per cent last year to £2.2 million.

Revenue rose by 19 per cent to £6.9 million at the Grantham-headquartered firm, which also completed acquisitions of the Newton Fallowell and Goodchilds franchised network during the year.

The company operates 212 franchises across the region including outlets in Peterborough, Cambridge, Bourne, Spalding, Sleaford, Boston, King’s Lynn, Bury St Edmunds and Melton Mowbray.

Looking ahead, Belvoir Lettings says it expects to be at the forefront of further consolidation in the property franchising industry.

The firm has also been buoyed by prospects of growth in its target market and by a tendency of people to favour home renting over ownership.

It says that government changes to stamp duty for landlords and second home buyers and alterations to mortgage interest tax relief have not harmed the industry.

Mike Goddard, chief executive of Belvoir Lettings, said: “2015 was a pivotal year for Belvoir.

“The company commenced its strategic vision of a multi-brand operations with the acquisitions of Newton Fallowell and Goodchilds, substantially increasing our presence across the East and West Midlands respectively.

“Looking to the future I expect Belvoir to be at the forefront of further consolidation within the property franchising industry.”

In its preliminary results for the year, the company says the proportion of revenue from property sales generated by the estate agency business it introduced in 2014, rose by 60 per cent to £1.4 million. Some 111 outlets now offer property sales compared to 30 in 2014.

However, the business says it remains predominantly lettings-based with a ratio of lettings to sales revenue of 77:23 compared to 84:16 in 2014.

The residential lettings market looks buoyant for Belvoir - its 37,000 managed properties make up just one per cent of its target market - but there are concerns about a shortage of houses for home owners and for rent.

Dorian Gonsalves, managing director of Belvoir, said: “In recent years there has been a rapid growth in the residential lettings market and the outlook is set to continue.”

“The percentage of landlords who use a letting agent to provide specialist advice and expertise is set to increase, as is the number of dwellings within the private rented sector.”

But Mr Gonsalves added: “An increased supply of properties for homeownership, and within the rented sector, is needed to satisfy current housing needs in the UK.

“The Government has reacted to this demand by announcing a number of new initiatives in 2015.

“In addition to increasing supply of new builds, changes to stamp duty for landlords and second-home buyers was announced along with changes to mortgage interest tax relief, both of which will result in higher acquisition costs and operating costs for landlords.

“Apart from a rush to beat changes in stamp duty, these changes do not appear to have had any negative impact on the housing market.

“Demand for rented properties remains high, landlords are continuing to acquire new properties and it is clear that privately renting remains the tenure of choice for a mobile and flexible workforce, and for those who do not wish to be tied to homeownership.

“Housing in the UK is moving more towards its European counterparts where in Germany, for example, over half of the population chooses to rent rather than own a property.”