Are Landlords Looking To Sell In 2021?
2020 has been a difficult time for most of the world, affecting virtually every industry and creating widespread changes to the everyday lives of millions of people. The property industry has seen the effects of the pandemic, and experts are now predicting how the property market will respond in the near future.
The property market in 2020
Tenants in 2020
The pandemic has led to job losses across all sectors, affecting some tenants’ abilities to pay rent on time. The National Residential Landlords Association has reported that private sector rent arrears in England are at £437 million due to the pandemic. However, it’s important to remember that all rents combined in the UK average about £51bn.
Landlords in 2020
Some landlords aren’t getting their rent on time, and are therefore faced with higher costs due to constant changes to regulations and taxes. Letting their property no longer offers the same guarantees as the boom in the noughties did, and some landlords may consider the difficult decision to sell. Two-thirds of landlords reported that Covid-19 harmed their business, and 18% of landlords took it one step further, saying the impact was significantly negative. As a result, they are asking the government to offer more assistance to tenants who can no longer pay rent such as interest-free or low-cost hardships loans to cover the rent money owed.
Government property response in 2020
The government reacted to problems experienced by both tenants and landlords with a variety of actions. They instituted a ban on tenant evictions, which has since been lifted, but most tenants are still expected to receive at least six months’ notice if their landlord is going to evict them as per the Coronavirus Act 2020. Furloughing staff and increasing universal credit, and increasing housing allowance helped many tenants to continue keeping up with rent payments. For landlords struggling with mortgage repayments, the government introduced mortgage holidays. All of these government-led actions come with an expiry date, and as the pandemic continues to shift, the market will react accordingly.
The property market in 2021
Letting agents, property investors, lawyers, listing websites and many other players in the property market are vocalising their predictions for the market’s behaviour in 2021. Currently, the market is experiencing somewhat of a boom, with record-high house prices and transactions recorded over summer 2020. Any predictions can change if the pandemic changes drastically, but either way, this boom won’t last forever. Experts say the market is likely to crash next year, which isn’t necessarily as bad as it sounds since it could bring opportunities for landlords to pick up cheaper rental properties and renters paying slightly lower rents.
Increased rental demand in 2021
Rightmove’s May 2020 survey found that tenant demand grew by 33% when compared to May 2019. Many agents also report increased interest in suburban housing, as opposed to urban, due to the potential shift in attitude towards home-working. People who were looking to buy but have had to change their plans due to the pandemic are happily turning to the private rental sector.
More people are becoming buy-to-let landlords
With increasing unemployment affecting everyone, a second source of income will come in handy. If you were planning on buying a buy-to-let property, now might prove to be a smart time in the market. Of course, there are no guarantees. But with the stamp duty holiday and house prices possibly falling slightly in 2021, savvy landlords could benefit.
How can Mashroom help landlords in 2021?
If you need tenants for your property, Mashroom can help maximise your chances by advertising on the most popular property listing websites, for free! Landlords enjoy total transparency over the renting process and can liaise with tenants directly through the platform. If an existing tenant is moving out, there’s even the possibility of teaming up with them to let the property faster. And then there’s round-the-clock support from the Mashroom team. With a free listing, landlords can maximise void periods and increase yields for a better way of renting out their homes.