The “Outsourcing” behemoth Serco has an interesting “calling all landlords” message on its webpage. The company states that it is looking for “landlords, investors and agents” with rental properties available (in the North West, Midlands and the East of England) in all category types - HMO, single family, care homes, residential and former student accommodation. 5 year + leases with no voids are promised as is monthly rent paid on time and with no arrears.

Serco will pay council tax and utility bills and, latent or structural disrepair apart, will cover repairs and maintenance but will not charge the landlord any management fees. But, that’s not all; Serco will also cover the “Full HMO and property management including monthly property and periodic safety inspections”. Best of all - for any interested landlord - it will be Serco, as the Tenant, who will be carrying out any of these duties that would normally fall to the landlord. Which investor landlord could ask for more?

Concurrent with Serco’s strategy, the online PRS industry news outlet, Landlordzone, has published an interview with the head of large Scottish rental portfolio holder Carling Group (with a portfolio said to be worth around £200 million). Graeme Carling stated that the company was looking to in large part to quit the private rental market to concentrate on “other areas of business related to property once it was no longer possible to extract value from the private rented sector”. Pointing to greater regulation in the Scottish PRS, he added that the company had realised they would have to double the size of their portfolio just to stand still in terms of net income per unit.

What is truly interesting is what he says next: “I think the market ‘going corporate’ was and is the right way to go for the PRS - it needs professionalising, including via better regulation” and the interview goes on to clarify that the company is using the cash raised by selling off its rental properties to buy up building services firms to create a group that can “help the UK upgrade its buildings across all the different sectors including residential - “It’s a big opportunity because there are not many buildings in the UK that won’t need some sort of work done to them to meet the new EPC standards.”

So, what can be gleaned from the PRS market strategies of these two organisations? Well firstly, an understanding that compliance with housing standards is a key driver of success despite differing business models; an understanding of the importance of regulation - such as HMO licensing and selective licensing - in maintaining or improving standards; and an understanding of the nature of and the need for professionalism in the PRS underpinned by an acknowledgement of PRS market trend directions.

Of course Serco is a massive conglomerate and Carling is a large player looking to successfully grow even further by adapting to evolving circumstances (such as new and unavoidable energy efficiency requirements). But the moral of these two stories applies just as much to small investor landlords who must proactively look to future proofing their investment rather than fighting against market trends. It used to be said that many PRS landlords operated as “cottage industries” but that can no longer be the case. Local Authorities don’t just use licensing to regulate landlords, they are also looking to engage with landlords in specific areas that experience poor housing standards as evidenced by the local data. Small landlords need to pierce the bubble and actively engage, with the Local Authority, in return.