UK PROPERTY MARKET AND COVID-19: HOW LOCKDOWN IS AFFECTING LETTINGS
With 2020 officially behind us, many of us are looking forward to what new opportunities the new year might bring. The light at the end of the tunnel appears to be getting closer, with vaccinations offering a brighter year in comparison to 2020. That said, with the UK entering its third lockdown since the start of the coronavirus pandemic, it’s safe to say there has been some uncertainty in the property market.
The UK property market and Covid-19
We have seen residential sales prices drop, and although there was an initial spike in sales activity due to enthusiastic buyers, it has become apparent that the sales market is experiencing a decline.
Despite this, the rental market remains strong, with remote working on the rise and home schooling quickly becoming the norm. With many businesses adapting to change and making homeworking possible for their staff, people have continued to move home following the first lockdown in 2020, upgrading to rental properties with additional space, gardens and extra rooms. Whether it be to set up a proper home office, or to access some outside space, it can be argued that the pandemic has somewhat encouraged people to seek alternative living accommodation.
How lockdown is affecting the lettings market
The rental market offers families and professionals an easily accessible, improved quality of life at home, as ‘the new normal’ changes the perspectives of people in terms of what they value most in a property.
With the rental market remaining strong and the sales market beginning to decline, now is an excellent time to buy as a landlord or an investor.
In addition to this, the current stamp duty holiday is due to come to an end on 31st March 2021, which has caused a demand for residential properties. Homeowners are looking to sell and buy quickly, and as a result are accepting below market value offers. This scenario offers an opportunity for buy-to-let purchasers to make excellent long-term investments. When the economy bounces back, landlords will find themselves with an asset which has appreciated in value, and in the meantime, they can profit from rent by taking advantage of the growing tenant demand.
Whilst letting agencies are experiencing a particularly busy period with viewings and enquiries, residential sales agents are witnessing quite the opposite. If you are a current landlord, or a homeowner with a consent to let on your property, you might wish to consider keeping hold of the property rather than selling it, due to the rental market currently being more buoyant than the sales market.
Of course, negotiations are happening amongst landlords, tenants and lettings agencies, and rent rates have therefore decreased somewhat in certain areas. However, tenants are continuing to move and looking for new opportunities, so there is plenty of room for owners to profit by letting their properties.
Whatever your situation, we hope that it will soon improve, and wish you the very best in 2021.
