Rentals, has lockdown shifted the focus yet again?
Are we heading for a glut of post-lockdown landlords? Viewber looks at the current property investment landscape, will it create a wave of fresh investors.
There has never been such a sharp focus on job stability, wages and income. Furlough schemes, mortgage repayment holidays, bailout packages and grants have been introduced to try and keep the economy on an even keel but thousands of people are beginning to question their careers and wider long-term financial plans. Unexpectedly, the pandemic is prompting people to look at property investment as a new or additional income stream.
The appeal of investing in property has never truly waned, although changes to tax relief dimmed its star momentarily. The news coming out of lockdown, however, points to a very positive and growing private rental market with fantastic short-and long-term gains.
All change as people relocate
There are several strategies at play. Early indications show there’s potentially a major relocation shuffle on the cards – partly thanks to a growing number of people wanting to move closer to the countryside or to gain more private outside space - and partly because the working from home revolution will allow people to live much further away from business hubs. Many will rent before they buy when trying out new areas or to see if they want to make any switch permanent.
Buying time with rental properties
Financial uncertainty always pushes people towards the rental sector – with movers favouring the short-term flexibility and lower set-up cost of renting over a more permanent (and expensive) property purchase. In fact, Rightmove’s May 2020 property report revealed a surge in rental demand, with the property portal seeing its highest number of unique enquiries in one day since September 2019.
Zero returns on savings accounts
Finally savers – especially those in retirement – who have traditionally relied on savings account interest to fund their lifestyles are waking up to the suggestion that the Bank of England could drop the interest rate to below zero. This means savers would have to pay the bank to hold their money, rather than earn an income from it. Those with cash lump sums are now exploring alternative investment opportunities where the returns are greater.
If you are thinking of investing in property to capitalise on prevailing conditions, you may find the following useful:
Follow the yields
Investing in property sometimes means a buy-to-let miles from where you live. The trick is to track and follow the best yields – the amount of profit balanced with costs and borrowing. Zoopla recently revealed the UK’s top 20 cities that experienced the largest rental value rises (when comparing the last quarter of 2019 with the first quarter of 2020). The top 5 comprised: Nottingham, Bristol, Leeds, Stoke and Gloucester – with rent rises as high as 5.9% boosting the yields. The HomeLet Rental Index is a great place to get a geographical snapshot of where rents are rising or falling.
Take mortgage advice
Historically low interest rates are beginning to translate into low mortgage rates, with discounted products spilling over into the buy-to-let sector. Sage advice is to check with your current mortgage lender to see if they would offer you a buy-to-let product before using a financial adviser or online broker, such as thebuytoletbroker.co.uk, to find out if there are cheaper alternatives.
Consider management options
Running a let is bound in legal compliance – laws to protect the wellbeing, safety and rights of a tenant. Choosing a professional property management company will result in a fully compliant ‘hands-off investment’ with minimum involvement by a landlord, but this service comes with a monthly charge. Landlords who opt to self manage may find it helpful to join an industry body, such as the National Landlords’ Association, for advice and support.
Choose your type of let
Long-term tenancies have traditionally been favoured by landlords as they guarantee income for 6 or 12 months – sometimes even longer – with minimum turnover or hassle. In recent years and with the explosion of Airbnb, landlords have been exploring short-term and holiday lets. With a big question mark over international travel and even the role of the ‘staycation’, it’s wise to consult with a local letting agent when deciding on what type of let to offer.
Support services for new landlords
Viewber is here to assist landlords on their buy-to-let journey, no matter where they choose to invest. We offer a variety of services on a UK-wide basis, including:
- ‘On your behalf’ investment appraisals, with follow-up reports
- Accompanied viewings for tenants
- Vacant property visits during void periods
- Property condition inspections – pre-, mid- and post-occupation
- Check in, check out and ‘meet and greet’ services
- ‘Sit and wait’ for trades/deliveries facility
- Photography, videos, floorplans, dolls house models and 360? tours
- Live and recorded property walk-throughs
- Key safe supply and installation
Please get in touch if you would like to book any of the above.