It’s been widely reported that home buyers’ needs and wants have changed since the first lockdown in April and May last year. Two big shifts have been a rise in the number of people wanting to move into the countryside, where they’ve got more outdoor space, and a desire for the now-essential ‘home office’, which hopefully means fewer interruptions from family and pets!
But what about the rental market? Have there also been changes there that could impact on how landlords market existing lets and affect what new rental investments should aim to achieve?
The answer seems to be ‘yes’. Data from both Rightmove and Zoopla suggest that, as in the home ownership market, tenants are changing their views on where and what to rent and we can see ourselves that the way tenants search for property is definitely changing.
A move to the suburbs
The first big reported change is that tenants who no longer have to go into work every day appear to be moving to more suburban areas where commuting is still relatively easy, but there’s more space, both inside and outside the home. In addition, a lot of short-term let accommodation has understandably made its way back to the long-term rental market, driven by restrictions on travel and holidays.
Rightmove and Zoopla suggest these two things together have put a temporary downward pressure on some rents. Two of the areas hit hardest have been inner London and Edinburgh, both popular hotspots for short stay weekend visits and normally places where demand for long term rental property is higher than supply.
However at Romans we have found there are also many areas where rents are actually increasing rather than decreasing and demand is outstripping supply, so there are still a lot of great opportunities available for landlords to invest.
Great properties in good locations will always let well
In our experience, a good quality property in a great location will always let well. However, if you’re buying, refurbishing or letting a property for the first time since Covid hit, there are two important things to focus on. Firstly, make sure any outside space – whether that’s a balcony, garden or communal area - is made to look as enticing as possible. And, secondly, try to clearly identify an area where someone could comfortably work from home.
Virtual valuations and viewings are here to stay
The next change that’s been driven by the pandemic is the explosion in virtual viewings and this is something we expect will stay. So it’s vital to make sure your property can be easily viewed online, either through a video or the various online apps that have these features. At Leaders Romans Group, we have carried out over 41,000 sales and lettings virtual viewings since the first lockdown. We can also carry out accurate rental valuations virtually, if you’d rather we didn’t visit the property in person. The safety of both you and your tenants is always of paramount important to us.
Houses or flats?
Thirdly, more people are now looking to rent houses rather than flats. Although this shift is often attributed to Covid, it’s actually a trend that we’ve seen gaining momentum over the last decade. Flats are still popular, but from a demand and supply perspective, houses have definitely been growing in popularity and that’s just been pushed on by a year of lockdowns.
Although it’s often reported that people are renting because they can’t afford to buy, that ignores the huge fundamental demand from those who need or simply want to rent. This demand is at all levels of the market, from those in receipt of Universal Credit or Housing Allowance needing a small family home, through to senior executives temporarily working abroad and wanting to rent a spectacular house in the UK for themselves and their family.
If you’re looking to invest for the first time or re-evaluating your existing portfolio, it’s worth contacting your local Romans branch to find out what’s in short supply. Our experienced team can help you identify the best place to get the return on investment you’re hoping for, now and into the future.
Running a business
Lockdowns have definitely changed the way many of us work, with more of the population working from home than ever before.
Those who have lost their jobs have looked to find other ways of generating income and those on furlough have had more time to think about their careers and research their options. Some have decided to go back to work but now with an extra business on the side, while others have quit employed work altogether to build their own business.
It’s estimated by the Centre for Entrepreneurs that nearly half a million companies were launched in the UK between March and September 2020, many more than over the same period in 2019.
It’s important for landlords to be aware of how their tenant is now earning a living, as some tenancy agreements may stipulate that properties can only be used as a private residence and not for business purposes.
Will these trends last beyond Covid?
No-one knows how much our lives will change once the pandemic is over, but it’s clear that what both buyers and tenants want from a home has changed. The increased desire for outdoor space and better, more flexible use of inside space is likely to be here to stay.
So, if you’re investing in a flat, it’s worth finding one that has a balcony, communal outdoor space or a park nearby for people to escape to. If you’re buying a house, go for one with a great garden that’s as private as possible and easy for tenants to manage. And in any type of property, make sure there’s space indoors for a good home office, which allows some privacy and peace and quiet when needed.
With Spring on the way and a roadmap announced to lead us out of lockdown, we expect an increase in rental demand again as we saw coming out of lockdown last year.
If you’re thinking of re-letting, refurbishing or purchasing your next buy to let, contact your local Romans office and we’ll help make sure your property is at the top of your ideal tenant’s wish list.