The last two years have seen more many affected by the pandemic. One particular group in the property industry that has seen a major financial hit is landlords. With the eviction law taking a temporary ban, many saw a loss of income. This was due to reasons such as rent arrears and not being able to find suitable tenants.
As many as 47 per cent of landlords lost between £2,000 and £10,000 while a smaller minority lost more than £10,000. Of these many turned to other ways to make a saving during this time. This included using:
– Personal savings
– Reducing their living costs
– Utilising available buy-to-let mortgage holidays
Many landlords are sceptical of the outcome of covid with some even stating it will take over 6 months to recoup losses. With that in mind, why would landlords invest in more rental properties?
The last year has seen a rise in buy-to-let thanks in large part to the recent stamp duty holiday, some professional landlords took advantage of the savings with 43% making more purchases. With the end of the stamp duty holiday, a third of landlords are still looking to expand their portfolios. Most are looking to do so within the next year.
A high proportion of landlords have taken to investing in new areas due to a rise in demand for rural locations. This is due to priorities shifting since the start of the pandemic. With an increase of potential tenants now being able to work from home, city living is in less demand.
Keeping that in mind, cities tend to have the highest rent. Unfortunately, it also has the lowest rental yield for landlords. This is due to the high up-front cost of buying those properties.
Additionally, rent prices have been increasing over the past year. The market value of buy to let properties has also experienced an increase of 5.8% year-on-year. The value of the private rented sector has increased especially as there has been a decrease in available desired properties, leading tenants to compete for bigger homes.
After what has been a tough two years, it is a good time to feel more confident about buy to let properties. Especially with the rise in demand for rental properties.