23rd
Feb 2021
A property investment company’s latest study has found that the Covid pandemic is continually changing PRS landlords’ long-term perspectives when buying new properties.
Dale Anderson of the firm, said: “There's still plenty of interest from investors looking to become landlords. Indeed, the Bank of England putting banks on notice to prepare for negative interest rates in the next six months is doing much to fuel a shift of liquid assets into bricks and mortar. Many of our investors are already moving to do this. What's interesting is the sustained shift in the types of property that they are seeking.”
The firm has found that investors are showing preferences in new properties that offer a decent shared working space for tenants due to home based working, and of course in a large percentage of cases many people will opt to continue this practice long after the pandemic has been contained.
Dale continues: “The increase in home working is driving interest in on-site co-working spaces like never before and it's not stopping there. Many investors are now looking to put their cash into properties with an additional bedroom that can be used as an office. Landlords are adapting their behaviours and approach to the new normal.”
City centre properties are of particular interest to landlords who are studying trends from a Covid perspective, understandably city centres are no longer being ‘peopled’ as pre-Covid. This will no doubt revert back to fashion after the full vaccine rollout is completed but with the numbers of workforce that remain working from home, it will never be the same.
Because of this the property investment company’s team believes that many BTL investors will hedge their bets and invest in ‘homes’ that could include ‘on-site’ facilities to make local community life far easier for home workers.
According to a national estate agent’s chain’s typical residential market forecast the North West will have the best UK house price growth predicting that it will achieve an increase in prices of 27.3% in the next five years; the average UK growth over the same period is forecast to be 20.4%.
A leading online property portal bears this out, as its latest House Price Index shows that the best house price growth since April 2017 is topped by northern cities with Liverpool’s house prices increasing by 6.3% over the last twelve months, with Manchester recording a 6% growth. However the property investment company says that landlords may not be interested in the same locations as they were pre-Covid.
Dale concludes: “In big cities like London, Birmingham and Manchester, we are seeing investors looking at areas further out, such as the home counties and commuter belt towns for London. Kent is a good example of this – it has good transport connections for those who need to commute into London, as well as plentiful green space and more affordable prices than the capital. In Manchester, it is Salford Quays that is turning heads. Tenant demand is strong there and investors are racing to meet that demand.”
Continuing into 2021 there is no doubt all BTL home investors and private buyers are keeping their attention on whether the stamp duty holiday will be extended in the forthcoming budget.
However the situation remains the same as rental housing stock supply is still outweighed by tenant demand, and with the possibility of continuing negative interest rates BTL investors will still look to buy.
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