How 2020 has impacted the lettings market

With a pandemic, multiple lockdowns, a recession and an ever-changing strategy for Brexit to contend with, it’s safe to say nobody could have predicted how 2020 would pan out – not even property market forecasters!

But, despite concerns, the past 12 months haven’t negatively impacted the market as much as originally expected.

There was, of course, initial panic and uncertainty for many landlords who had empty houses or properties undergoing work that had to pause when contractors shut down, but this was soon eased as the world started up again and the market kicked back into action.

In our region, like many, easing of lockdown was followed by a mini boom as the property market reopened in June. This upturn has continued throughout restrictions, with residential and commercial properties that are realistically priced continuing to sell and the market remaining very strong.

The trials and tribulations of this year have hit everyone in different ways – and personal changes have had a tremendous sway on the property market as a whole. From relationships breaking under the strain of lockdown and the boredom of the same four walls, to first-time buyer dreams dashed due to redundancies and difficulties with mortgage applications, all have led to high demand for rental properties.

In fact, demand is so high that, since lockdown ended, almost all of our rental properties have been snapped up within minutes of going live online – some without being advertised at all – and many tenants are left struggling to find accommodation.

So, how does this benefit landlords? Greater demand for rentals leads to the ability to charge more on monthly rent. In October, the average cost of a newly-let property in the UK rose by 1.4% on the same month in 2019 – the first annual increase since the pandemic began to impact our lives in March, and a rise that has been warmly welcomed by landlords.

There’s good news for those looking to use this time to expand their portfolio, too. The stamp duty holiday, which was introduced to encourage buyers and ensure the strength of the property market, also allows landlords to make a significant saving due to the removal of the standard rate of tax below £500,000. A buy-to-let surcharge of three per cent must still be paid, however the holiday makes it cheaper for investors to increase their portfolio of mid-level properties.

Whether it’s your first or one of many, one thing to consider when purchasing a buy-to-let property is how tenants’ desires have changed during the pandemic. With the majority of the UK workforce working from home, many are pining for a home office, or at the very least enough space to set up a desk, and strong broadband speed is a necessity.

Only time will tell if demand will last and inflated rents will still be achievable as the country works to get back to some form of normality, but one thing’s for certain – if you’ve been considering letting your property, now is one of the best times to do so. Several savvy landlords are already taking steps to expand their portfolio and make the most of the boom while they can, while many first timers are using increased demand as an incentive to take the plunge.

For more advice and support on letting your property, get in touch with our expert team on 01642 603603 or lettings@brownsestateagency.co.uk.