The value of a residential sales business is currently about 25% of what it was before the Brexit vote. The reason for this is economic uncertainty and a lack of confidence in the housing market. The value of a let-only letting business is about 50% of what it was before the Brexit vote. This is due to economic uncertainty and the fact that a lot of the large letting agents are no longer prepared to deal with landlords on a let-only basis.
The value of a good quality managed letting business, however, has recovered sharply and they are now changing hands at about 85% of the level that we were achieving before the Brexit vote.
Personally, I think it is unlikely that multipliers will rise any higher and there are a lot of challenges facing letting agents over the next couple of years which could reduce income and profitability significantly. Landlords are selling their properties because of tax changes. The ending of Section 21 might frighten more landlords into selling their properties. The cost of complying with legislation is getting ever higher and the fines for making even small mistakes are astronomical. If you are thinking of selling your letting business, then now could be an excellent time to do so.
If you would like an up to date valuation of your letting business, phone me, Adam Walker, now on +44 (0) 845 226 9053.