Is Property Investment More Lucrative Post-COVID?

Research by a leading buy-to-let mortgage lender has revealed the impact that COVID-19 has had on the property investment market and, based on their findings, it’s looking like now, as restrictions start to ease, could be a good time to consider investing.

An investigation by Total Landlord Mortgages has looked into the effects COVID-19 has had on the buy to let market.

Whilst the pandemic may have had a significantly negative effect on the economy in general, it would appear from the results of the investigation that the buy to let market continues to thrive. In fact, in 2021, more property investors than ever before have formed companies to purchase buy to let homes. It would also seem that rental rates are set to increase beyond expectations too.

According to Companies House figures, almost 42,000 companies were incorporated by landlords in 2020, 23 per cent more than in 2019. That means there are a record 228,743 buy to let companies operating, with almost 50 per cent situated in London and the South East.

What’s more, because there are fewer properties to rent but more tenants seeking accommodation, rental rates are on the rise, according to the Association of Residential Letting Agents (ARLA), who reported that 60 per cent of landlords increased their rent prices in March 2021.

So, the burning question… with demand for rental property increasing, and the buy to let industry thriving, is becoming a property investor more lucrative post-COVID?

Total Landlord Mortgages Principal, Daniel Lee, in an interview with LandlordZONE, said that bricks and mortar have never been more important, especially now that for so many, the home has become not just a place to live, but also a place to work and socialise. This means that space for a home office has become a priority for tenants.

Potential landlords are looking for this additional space when considering new properties for investment, with a view to making them more attractive for tenants.

What’s more, the pandemic has led to a greater appreciation of outside space. Tenants are increasingly seeking homes with a garden in which to relax and socialise.

A KFH study showed that 58 per cent of tenants said that access to private outdoor space was paramount, and Ome’s rental market predictions highlight the move out of cities to meet a growing requirement for outdoor space.

On the subject of the possibility of rental rates rising, the latest official data from the Office for National Statistics reveals that rents have increased on average 1.4 per cent year-on-year each month since January 2020,a considerable 10.2 percent since 2015. As well as this, letting agents report that rental property supply has dropped for four months in a row. The fact that tenant demand is rising is behind the increase in rental rates.

Finally, buy to let mortgages are still popular amongst lenders, with some easing borrowing rules for landlords to make it easier to obtain finance.

Looking to take advantage of favourable market conditions and invest in buy-to-let property?

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If the favourable post-COVID buy to let market conditions are tempting you to consider property investment, you may be interested in a way to protect your endeavour and go hands-off management wise with a guaranteed rent scheme from homes2let.

We offer a total property management service, with an added benefit. Unlike a traditional property management service, the homes2let guaranteed rent scheme delivers a higher yield, whilst cutting your investment risk by ensuring your rent is paid on time every month, even during void periods.

Why not talk to homes2let to find out more? Our helpful team has particular expertise in the South London property investment market, and is on hand to impart a wealth of knowledge to help you draw the most out of your rental income. We welcome you to get in touch today.