Let Rental Property Market

How Is The Buy to Let Market Coping?

Property News

The 2020-2021 financial year is now just over the halfway mark. It, therefore, seems an appropriate time to look at the current state of the UK’s buy-to-let property market. Here is a quick guide to the key points of the past financial year.

COVID- 19

It’s impossible to mention the financial year 2020-2021 without mentioning the pandemic. The initial lockdown caused various issues for landlords. Most obviously, there were tenants needing rent breaks and, sometimes consequently, landlords needing mortgage breaks. Less obviously, there was the moratorium on evictions in both the residential and commercial sectors.

Overall, these emergency measures were used reasonably by all concerned. The challenge will now be progressing to a “new normal” despite the continuing presence of COVID-19. On the plus side, demand for rental properties remains strong, despite the Stamp Duty holiday. With the current uncertainty, many people are happy to have the flexibility of renting.

Brexit

Although Brexit is officially yet to happen, the reality is that it has probably already been priced-in to the property market. Given that the referendum was in June 2016, it seems reasonable to assume that anyone who was going to flee the country has fled it already. This means that there’s unlikely to be a sudden drop in demand just after “B-Day”.

It’s also worth noting that EU nationals only ever formed a very small percentage of the UK’s total population. This means that even if more do leave, the overall impact of their departure is likely to be minimal.

The North/South Divide

It’s been a long time since residential landlords in and around London had much to celebrate. So far 2020 has been a particularly grim year for property investors in the Thames Valley area. What’s more, it’s hard to see matters improving any time soon.

COVID-19 has forced companies to invest in the infrastructure needed to support remote working and/or eCommerce. Now that this is in place, many companies have a strong incentive to reduce, or even eliminate, their use of city-centre office space and/or retail space. This has obvious implications for their workers’ choice of a place to live.

One very likely outcome is that people who want to experience the city-centre lifestyle will move from London to the Midlands and North. The cities there have much the same range of attractions but are much more affordable. People who don’t really want to live in a city centre will simply move somewhere other than London.

The investment property market

This financial year hasn’t been all bad news for landlords. The current Stamp Duty holiday is good news for any investor wanting to adjust their portfolio. Investors should, however, act quickly, if they have not done so already. The holiday is scheduled to close at the end of March 2021 and the Christmas break will eat up a part of the remaining time.

Another plus point is that interest rates are at historic lows and mortgage-lenders are eager to fill their books with well-qualified customers. Admittedly the exact availability of deals tends to go up and down with market forces. In general, however, the outlook seems reasonably good.

Author Bio

Mark Burns is the managing director of property investment company Pure Investor, who specialise in UK property investment and Buy-to-Let Property Investment.

Leave a Reply