THE ONGOING POTENTIAL ATTACHED TO SHORT-TERM RENTALS

As the travel and hospitality sectors continue to battle ongoing challenges, these are areas which landlords and investors are keeping a close eye on in a bid to increase yields and diversify their portfolios. Holiday and short-term lets have risen in prominence over the course of 2021 to reflect ongoing international travel limitations, the rise of the staycation and the attraction for Airbnb-type properties.

This trend is likely to continue as opportunities are becoming more evident for property professionals in urban areas, as well as coastal areas, as the UK gradually opens its borders to more tourists. In addition, some workers and their employers are opting for short-term lets as more flexible and secure places to stay whilst heading back into their London offices.

THE CONTINUED RESILIENCE OF THE BTL SECTOR

The medium to longer term effects of the pandemic continue to have a major bearing on various industries, sectors and individual businesses within these. The housing and mortgage markets have been fortunate to emerge from these challenging times relatively unscathed, although it’s evident that some homeowners, landlords and tenants have suffered to some degree. And we can’t, and mustn’t, ignore the financial strain being placed on such people.

PROUD TO BE SUPPORTING MOVEMBER 2021

Dynamo and Dynamo for Intermediaries have embarked on a new challenge: Movember 2021. The team members will be either growing a moustache or committing to run or walk 60km throughout November in order to raise funds for Movember UK’s important work.

A growing number of men – around 10.8M globally – are facing life with a prostate cancer diagnosis. Globally, testicular cancer is the most common cancer among young men. And across the world, one man dies by suicide every minute of every day, with males accounting for 75% of all suicides. Since 2003, Movember has funded more than 1,250 men’s health projects around the world, challenging the status quo, shaking up men’s health research and transforming the way health services reach and support men.

TENANT DEMAND SHOWS FURTHER INCREASE

One of the most positive stories to hit the buy-to-let sector in recent weeks centred around tenant demand hitting an all-time high in Q3. This headline emerged in research from Paragon Bank which outlined that almost seven in 10 (69%) landlords said they had seen demand grow in Q3 – the record high – with 36% describing this happening to a ‘significant’ level.

URBAN VS RURAL RENTALS – A DISTRIBUTION SHIFT

One of the most noteworthy effects of the pandemic on the rental market has been the shift in the distribution of available properties between urban and suburban areas.

According to Rightmove, the imbalance of supply and demand for rental properties in these areas has led to an 11% rise in asking rents compared to pre-pandemic levels. The average asking rent in suburban areas across Great Britain is now suggested to be £1,041 per calendar month, up from £940 in February 2020. In rural areas, rents have jumped from £1,141 per calendar month to a current level of £1,264. Urban rents are up by just £25 over the same time period, from £1,347 to £1,372.

THE PANDEMIC-INDUCED SHIFTS RESHAPING THE BTL MARKET

As activity levels continue to slow down a little, there is an opportunity to reflect on the past 12 to 18 months and identify changes in tenant demand and landlord behaviour to build a better picture of the BTL sector moving forward. With this in mind, some enlightening research emerged from Goodlord and Vouch to reveal which pandemic-induced shifts have proved short-term, and what market movements look set to reshape the industry permanently.

The report, which also includes insights from some key industry figures, cited sustained optimism throughout the industry with growing levels of positive sentiment being demonstrated amongst letting agents and landlords. Although challenges were still evident.

THE BTL HEATWAVE CONTINUES

It’s been a busy summer across the buy-to-let marketplace. An array of landlords remain well placed to benefit from some highly favourable conditions as competition heats up across the lending arena, rental income is strong and a lack of good quality stock continues to fuel demand. Another important factor within this is improving rental voids and this trend was evident in recent data from Goodlord.

This outlined that the North West saw the biggest month-on-month decrease in void periods in August, with its average dropping from 20 days in July to 18 in August – a decrease of 10%. London and the East Midlands also saw their average void period reduce in August, by one day.

RENTAL ARREARS ON THE DECLINE

It’s no secret that the pandemic has impacted landlords and tenants in many different ways. From a financial perspective, it has placed additional pressure on a variety of businesses and personal incomes. As such, it’s important to chart these personal journeys and form a better understanding of how such entities are coping.

TENANT DEMAND HITS RECORD HIGH

The proportion of landlords reporting increasing tenant demand has hit its highest level since 2016.

Research from Paragon Bank found that just under 39% of landlords have seen increased tenant demand over the past three months, with 18.2% saying it has grown ‘significantly’ and a further 20.3% reporting slight increases. The percentage of landlords seeing growing demand has risen by 8% since the prior quarter and there’s a continuing trend of increasing tenant demand in the form of a 25% rise year-on-year. Additionally, there was a 2% decrease in the proportion of landlords reporting a fall in tenant demand compared to Q1 2021.

THE BTL MARKET IS HOTTING UP

Summer is finally here. For how long we don’t know, but let’s enjoy it while it lasts. And it’s not only the weather which is hotting up.

On the back of robust yields, increased product numbers and competitive rates, it’s no surprise to see confidence rising across the BTL sector and there is little to suggest that this is likely to fall anytime soon, despite the tapering of the stamp duty holiday.

This is a sentiment which was highlighted in recent data from Paragon Bank as it revealed that 53% of mortgage intermediaries expect to see an increase in buy-to-let business over the next 12 months. This figure compares to a figure of 50% – when respondents were asked the same question in Q1 2021 – whilst the proportion expecting declining levels of buy-to-let business remained consistent at 10%.

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