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INTERVIEW: Why one of UK's biggest PRS landlords sold off their properties

prs landlords carling

Scots entrepreneurs Graeme and Leanne Carling were one of the most successful landlords of the late noughties, taking advantage of the weakness in the property market following the global financial crash to build a bricks-and-mortar empire worth �200 million.

This made their company, the Carling Group, at one point one of Scotland's biggest private residential landlords.

But while some landlords in their shoes would be happy to rest on their laurels, Graeme tells LandlordZONE that it was always their plan to pivot into other areas of business related to property once it was no longer possible to extract value from the private rented sector (PRS).

He says the Scottish Government's greater regulation of the PRS hastened these plans and in 2019 the couple decided to start exiting the market.

'We'd seen our net income per unit dropping and realised we were going to have to double the size of our portfolio to make the same income as we were back in 2009-2011,'� he says.

'It was just getting too tough and we'd been to some meetings with the Scottish Government during which you were frowned upon as a small-time landlord, and to a certain extent you still are, and it was clear that legislators wanted to professionalise the sector and squeeze the smaller landlords out.'�

So after an initial attempt to scale up was thwarted by a lack of properties for sale that offered appropriate margins, the Carlings began to sell off their PRS properties.

They still ahve some left which are mostly those with long-term tenants, along with some student and workforce accommodation.

PRS halted

'We've halted the PRS stuff and I am glad we did,'� he says. '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 anyway in Scotland, we're up against a huge social housing sector which has access to cheaper funding and grants.'�

So how is the Carling Group going to make its profits in the future? The firm has been using its property disposal cash to buy up building services companies in Scotland and England, all part of a plan to create a large group with competencies across the board 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,'� he says.

'We see that as a huge market and something we know about as a substantial property owner including maintenance and upgrades. You can say we've flipped sides.

'Despite the distractions of the economy and politics, that 2030 EPC date is still there and that's why we're looking to acquire buildings services operators across England so we can combine these businesses and tender and quote and win some of the substantial government works within the existing built environment 

'We want to become a national operator - that's out real focus at the moment.'�


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