The world has changed dramatically from the beginning of the year. We’ve had to adapt to new ways of living, working, doing business, and staying connected with our loved ones. When all these restrictions will be lifted permanently is uncertain. So, everyone will need to stay flexible and resilient.
This article does not constitute advice. Professional advice should be taken prior to acting on any part of it. Your home maye repossessed if you do not keep up repayments on your mortgage or any other debt secured on it.
The performance of the buy-to-let property market is always reflective of the overall economy.
By this I mean factors like the number of mortgage approvals and the stock available will all be dependent on the conditions of the market which, in turn, affects borrowing costs, and the rental market, which all impact a landlord’s business.
It hasn’t been easy over the last few years in the buy-to-let sector, with a constant onslaught of legislation and changes designed to reduce landlords’ profits.
So in order to stay profitable, many have had to pivot their strategy. We’ve had some property investor clients take this as an opportunity to sell before prices drop. Others have had to reduce their rent – with Hamptons International reporting lower rents compared to the same time last year. All these factors make flexibility a requirement for buy-to-let landlords.
Consumer confidence can have a significant impact on the property market.
Sometimes it doesn’t matter what economic initiatives are put in place. If people are nervous to spend, they won’t spend. This is why consumer confidence also plays a key role alongside the housing activity indicators mentioned above.
With the reopening of non-essential high street shops, trade still has a long way to go to return to a state of semi-normalcy. This will, of course, have a knock-on effect on the wider economy, which brings everything full circle.
Letting and estate agents are the source of intel that help determine market performance.
According to Knight Frank, the number of valuation appraisals for rental properties peaked at the beginning of June. The weekly number of new prospective tenants skyrocketed, increasing demand in the rental market. There’s still work to be done to get the numbers back to the level of years prior, or even just the end of last year thanks to the short-term boost from Brexit.
How might the buy-to-let market look for the remaining months of the year?
If you’re a property investor or commercial landlord, do you have a plan for your business depending on how the market will change as a result of the global pandemic? It’s important to be prepared for all eventualities, but it’s good to know that rental demand is still strong even if you need to carefully monitor the books and make cuts in order to stay in business.
There will always be a demand for rental properties. They’re essential housing for UK residents at every stage of life. Lenders are providing help landlords might need in order to cater to the increasing demand from new tenants. This isn’t an easy task, but some positive signs are emerging that we are heading in the right direction. It’s about time the buy-to-let sector got some good news.
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