Wildstone has reported a threefold rise in enquiries from residential landlords looking to add billboards to their properties over the past three years.
The surge comes as the Renters’ Rights Bill nears becoming law.
The bill, which returns to the House of Lords on 14th October, will remove Section 21 “no-fault” evictions, cap rent increases to once a year, end fixed-term tenancies and ban bidding wars above advertised rents.
Tenants’ groups have backed the reforms but many landlords are reconsidering their position in the sector.
Margins have come under pressure from rising mortgage rates and the loss of mortgage interest relief.
Research from Aldermore found that one in three landlords were considering leaving the private rental sector, and nearly a third had sold properties in the last year.
Landlords who remain are looking for extra income, with many now considering billboards as a second tenant.
Mike Duty (pictured), head of development at Wildstone, said: “Since the former government published its White Paper on rental reform three years ago, landlord concerns have steadily increased.
“It’s clear the environment for landlords has become tougher.
“It’s no surprise then that enquiries to us have tripled in that time.”
Duty added: “Landlords are starting to view outdoor advertising leases as a practical solution to squeezed margins, offering a secure, long-term additional income stream.
“We are effectively a second tenant. The property owner still has their residential tenants inside, but Wildstone leases the exterior brickwork or a small piece of their land.
“That income is predictable, usually for 16 to 20 years, which can make a critical difference to landlords struggling with yields.”
He said: “We regularly hear that the income is being used to pay off mortgages, cover maintenance or reinvest in other properties.
“For some, it has been the difference between holding onto an asset or selling it.
“We’ve even had cases where the addition of digital billboard income has been a key factor in a mortgage being agreed as lenders recognise it as guaranteed income.”
He added: “With the sharp rise in interest rates in recent years, some landlords have struggled to remortgage using only rental income as they have been unable to meet lenders’ interest coverage ratio requirements.”
Duty expects more interest once the bill becomes law.
He said: “What we are seeing now is just the beginning. Once the legislation is in force, and landlords fully understand the implications, we expect enquiries to climb further.”
