TENANT DEMAND CONTINUES ON ITS UPWARDS TREND

There has been a raft of data in recent weeks around strong levels of rental yields and rental asking prices which represents great news for landlords as we face the additional challenges attached to tiered lockdowns across the UK.

In addition, tenant demand is also reported to have reached a four-year high in the third quarter of this year. This is according to research carried out on behalf of Paragon Bank which outlined that – in the three months to the end of September – 29 per cent of landlords reported rising tenant demand, the highest level since the third quarter of 2016. Out of the 700 landlords surveyed, one in 10 reported significant growth.

HEIGHTENED DEMAND FROM FIRST-TIME BUYERS

We all know how the temporary rise in the stamp duty threshold has accelerated activity throughout the housing market. Whilst many headlines have focused on the rise of first-time buyers for homeownership purposes, recent data from Legal & General Mortgage Club suggested that there is also heightened demand from first-time buyers looking to enter the buy-to-let sector. Searches made by advisers through its sourcing tool showed that the criteria search combination for first-time buyer, first-time landlord and non-owner occupier has seen an 18% increase since the beginning of September.

KEEP TRACK OF CHANGING TENANT PRIORITIES

Many factors continue to impact the current residential and BTL markets. Stamp Duty changes have accelerated activity within the purchase market and the lockdown period has challenged the way that people are living and working which is leading to a number of questions being asked of FTBs, homeowners, landlords and tenants.

Will the attitudes of the younger generation change towards the huge commitments necessary for getting onto the housing ladder? And will the homeownership dream even be achievable for the younger generation in the current economic climate? Could this combination of factors lead to even more people becoming reliant on the rental market?

A BUSY SUMMER AHEAD FOR THE BTL MARKET

The buy-to-let sector has seen a raft of positive news in recent times as lenders are becoming increasingly active and landlords are taking advantage of some favourable conditions. The recent change in the stamp duty threshold has served to generate an even greater volume of enquiries and this demand is showing no sign of slowing down anytime soon.

Of course, the additional 3% stamp duty surcharge on additional properties will still apply, but investors will benefit from not having to pay the standard stamp duty on purchases of up to £500,000. According to research from Hamptons International, the stamp duty holiday will save the average investor almost £2,000 which will encourage more landlords and investors to add to their portfolios before next spring, and many are looking to take advantage of this sooner, rather than later.

STAMP DUTY AND ELECTRICAL SAFETY: KEEPING TRACK OF BTL CHANGES

The buy-to-let sector is well accustomed to change, but this doesn’t mean that landlords should become complacent when it comes to the implementation of any new policy or legislation.

In a quick recap of recent BTL-related events, April saw the introduction of minimum energy efficiency standards and the second part of the Tenant Fees Act was introduced in June. It is now time for landlords to turn their attention to the new electrical safety standards which came into force on 1st July. This means that all electrical installations must now be inspected and tested by a qualified person before a new tenancy begins.

ADVICE AND THE TECH BENEFITS FOR LANDLORDS

We’ve seen a huge amount of tech innovation throughout the buy-to-let marketplace in recent times and even more so during the pandemic. This period has really shown how lenders and advisers are utilising a variety of online platforms to support landlords, investors and developers in getting to grips with shifting market conditions.

There has been a plethora of webinars, online events, virtual roadshows, launches of Covid-19 information hubs and live feeds, plus regular updates across social media. And this demand for information around BTL was evident when a recent series of webinars hosted by specialist finance trade body FIBA saw a whopping 1,000 registrations from the intermediary community.

FOLLOW THE RISING RENTAL TRENDS

Following my recent blog post on the return of surveyors and valuers to the property market, it’s interesting to see what impact this may have had on the rental market, from a statistical sense.

According to Rightmove, demand for properties in the private rented sector is up by 22% compared to last year. The data from the property website showed that since letting agents were permitted to reopen on 13 May, the demand for rental homes has increased at a quicker rate than the sales market. Lockdown break-ups, job losses and urgent relocations are thought to have contributed to this surge in demand throughout the rental sector.

THE RETURN OF PHYSICAL VALUATIONS – GREAT NEWS FOR THE BUY TO LET SECTOR

The return of surveyors and valuers – on the back of the government’s guidance on moving home during the coronavirus crisis provided by Housing Secretary Robert Jenrick – is highly positive news for the housing and mortgage markets, not to mention the economy as a whole. For several long weeks, many lenders have not been able to process new mortgage applications because they couldn’t instruct physical valuations. Naturally, this has had major repercussions for landlords, homeowners and first-time buyers who were already in the process of, or thinking about, property purchases.

IS THERE LIGHT AT THE END OF THE LENDING TUNNEL?

It's important that we don’t get too carried away, but it’s highly encouraging to see lenders steadily returning to the market and new products emerging. Of course, we’re still far away from pre-lockdown market conditions and it will be some time until those heights are reached once again. However, business is still being written and the value of expert advice in getting these deals over the line has never been higher.

MORTGAGE PAYMENT HOLIDAYS: WHAT LANDLORDS REALLY NEED TO KNOW

All lenders, large and small, have been asked to make difficult decisions across many aspects of their business. They have faced a huge amount of pressure from the Government in terms of having mortgage payment holidays forced upon them at relatively short notice. In general, lenders have reacted quickly, effectively, and decisively but how are landlords responding to this issue?

It depends on the individual in question, and there are many factors to consider before deciding upon this option.

• Taking a mortgage payment holiday should not impact your credit history and it can help with cashflow if tenants are struggling to pay their rent

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