Supply & Demand- A Landlord's Dilemma.

Supply & Demand- A Landlord's Dilemma.

20 October 2020

Increased activity from investors to buy more property is a direct reaction to a couple of factors. Investors ultimately are numbers people, so when the numbers stack up out comes the metaphorical cheque book (do they still even exist?). The current Stamp Duty Holiday lowering the tax payable on a Buy To Let purchase combined with the current spike in rental prices caused by the surge in Tenant activity and insufficient property supply creates the perfect storm for Investors. Getting more for your money is always nice after all! But there is an interesting paradox created by the current conditions… 

 

Investors returning to the PRS are unlikely to provide enough additional property to quench demand from very active and motivated Tenants who can move with fewer financial barriers than ever before since conditional fees (for the most part) were abolished in 2019. The likely outcome here then is that as long as demand outstrips supply, market forces dictate that rental prices will continue to rise. Something to make all landlords smile – finally some good news! But don’t get caught out by not looking at the bigger picture.

 

Demand is high and rents will rise, but the job retention scheme will end and employment situations will change as a result. Statistically this will lead to more rents not being paid - with the time to regain possession never longer, with 6 months notice needed in most cases before you can even apply to court. There is a certain irony with the market driving up rents when tenant ongoing employment stability is far more uncertain than at any other recent time.

 

Now I am not trying to be the harbinger of doom, just the voice of reason to ensure that you are fully protected in these uncertain times. Any landlord right now needs to have given serious consideration to protecting their investment income with Rent & Legal cover, many of our customers do this already and have the certainty of continuing rental payments if their tenants run into difficulty. If you are not in this pragmatic group, and lets face it, the world may well have been a very different looking place when your tenants moved in - then all is not lost – we can provide cover for you on a case by case basis – if you want to know more fill out the form here and we will talk you through the inevitable terms and conditions (we promise its nothing too bad).

 

Trust me when I say we are all happier knowing you are covered and with rising rents it almost pays for itself. 

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