The government’s stamp duty holiday hasn’t just pumped adrenaline into the residential holiday market – it’s also provided a shot in the arm for buy to let investors too. Research carried out by a leading business insurance company has found that 10% of landlords plan to add further properties to their portfolio, which is a big increase on the mere 3% of landlords planning to do the same last December.
What’s interesting, is how the pandemic has changed the nature of such investments. Whereas investment properties in major cities like London have traditionally been a popular choice for landlords, many now feel that city centre properties no longer hold the same appeal for tenants.
The deprivations of lockdown caused many renters to rethink their housing priorities. After weeks of being stuck inside with family, during a long, hot summer, people are now keen to live in a property with some outdoor space. This is where flats and city-centre houses are limited, as many don’t have a garden or even a back yard.
These changes are also reflected in the residential property market, where buyer demand for homes in villages and small towns is off the charts. Rural properties are selling almost as soon as they go on the market.
Larger Properties In-Demand
“The pandemic has resulted in people spending more time at home – both for work and leisure, while many of the benefits of city living have been impacted. It’s no surprise to see that renters are valuing larger properties with outdoor space,” says Alan Thomas from Simply Business.
“There appears to be a shift in terms of what is considered a desirable property by tenants, and residential landlords – crucial to both the economy and the local communities where they provide housing – along with the market in general, are reacting to this.”
What Are Tenants Looking For?
If you are planning to expand your portfolio in the next few months, it’s important to consider what your target tenants are looking for. Many businesses are now encouraging employees to work from home, which has led to a decline in demand for flats and city centre dwellings. The same is happening in commuter towns. As unemployment rises, particularly in the retail, service, and hospitality sectors, many EU workers will be heading home. This will lead to a drop in demand for cheaper housing, especially rooms in HMOs.
Assess Long Term Potential
It’s worth looking carefully at your current business model to assess whether it’s got long-term potential. Consider whether now is a good time to sell less profitable properties to take advantage of buyer demand. If you are considering investing in new properties, pay close attention to what renters are looking for. Properties with gardens are likely to be high on their list of must-haves.
Read More Like This.
What are Renters Looking For During a Pandemic?
Buying a Property with Tenants in Situ
A Landlord’s Guide to Rent to Rent