With the UK currently in recession, most people will be reviewing their personal finances, and their business finances, if applicable. If you are a landlord, it is natural you will review the market, and try to predict what is likely to happen next.
The uncertainty of these times makes it difficult to predict the future with any great confidence, but equally, uncertainty is of benefit to the rental market. The housing market slows down when the economic future is uncertain, but this creates more demand in the rental market.
There is slight caution in the rental market
Paragon Bank commissioned a study of UK mortgage brokers, which revealed the following responses:
41% of respondents expect BTL business to increase in the next year
28% of respondents say they expect BLT mortgage demand to remain stable
Richard Rowntree is the Managing Director of Mortgages at Paragon Bank and he said; “Despite the buffeting that coronavirus has caused to the mortgage market, and housing sector more broadly, there is clearly still strong and stable demand for buy-to-let via intermediaries, which is reflected in the results of this survey.”
Richard continued by saying; “We have seen a solid rebound in buy-to-let business since the housing market reopened in mid-May and landlords have been unlocking capital to invest and grow their portfolios further. We expect to see increased demand for rented property underpinning growth in the coming months as people delay house purchase or cannot obtain a mortgage with the removal of higher loan to value products in the residential market.”
Richard also said; “Coronavirus has had a clear and damaging impact on the economy and the UK as a whole, but the long-term fundamentals underpinning demand for buy-to-let remain unchanged. The UK has a growing population with increasing numbers of households and the private rented sector will provide a good quality home for many of them.”
The UK rental market has grown
According to recent Government figures, there has been an increase of 1.7m rental households in the past decade. Equally, there has been an increase in people living alone. In 2018, there were more than eight million people living alone in the UK, and figures indicate a significant proportion are living in rental property.
The stamp duty holiday provides opportunities for landlords
If you are a landlord who believes these figures offer you the confidence you need to develop your property portfolio, there are opportunities. The stamp duty holiday lowers the overall cost for property investors, and this helps you to create more attractive expected rental yields.
Landlords still have to pay the surcharge on additional property purchases, but the holiday is applicable for anyone buying property before 31st March 2021.
For rental enquiries in Stansted, please feel free to call us on 01279 358809 or why not email us at firstname.lastname@example.org. With considerable experience in the local market, and free valuation services, we look forward to helping you move.