We all know that Covid-19 has changed business dynamics across a multitude of sectors and the mortgage market is certainly no different. With this in mind, it was interesting to see research from Quotezone – which covered a sample of landlord insurance quotes from 2019 to 2020 – highlight that redundancies and furlough may have created an emerging trend of small and first-time landlords.

Although the majority of the 19,000 landlords sampled reported owning their property for in excess of five years, a more recent spike emerged with properties owned for ‘less than one year’ seeing a 22% year-on-year rise during the pandemic. The data also showed that the average age of a landlord in the UK is 51. It added that, with only 52% of landlords using cash to purchase during 2020 – the lowest figure on record – buy-to-let is an increasingly viable option for many UK buyers.

Although the world continues to change, the fundamental principles underpinning the private rented sector remain. Despite talk of a mass exodus from urban districts, according to new research from Paragon Bank, over two-thirds of landlords will continue to look for property in such areas for their next portfolio purchase. 36% plan to buy in a suburban area and 6% are looking at rural locations. 66% of landlords said they plan to buy in the same area as their existing properties, with 10% targeting new areas. 20% said it would be a mixture of both.

The growth in the appeal of limited company lending has been evident since 2016 when the 3% investor stamp duty surcharge came into force and the proportion of tax-deductible mortgage interest on buy-to-lets held in personal names began to be phased out. In fact, since the beginning of 2016 and the end of 2020, more companies were set up to hold buy-to-let properties than in the preceding 50 years combined.

This progression was recently highlighted in research from Hamptons which showed that there were a record number of new limited companies set up to hold buy-to-let properties in 2020. Last year there were a total of 41,700 buy-to-let incorporations, an increase of 23% on 2019. The numbers have more than doubled since 2016, rising 128%. This means that at the end of 2020 there were a total of 228,743 buy-to-let companies up and running, an all-time record.

2020 has, at times, been a year which seems to have lasted forever. On the other hand, there have also been moments when it feels like it has flashed by in the blink of an eye. It has certainly proved to be a year of two halves.

When focusing on the buy-to-let and housing markets, there are many reasons to be optimistic moving into the new year. Whilst we can’t, or shouldn’t, gloss over how tough the past nine months have been, we – as a company – feel we are in a stronger place than ever. The dedication, flexibility, drive and skill shown by all our people throughout this time has been truly inspirational.