A survey recently conducted of 14,000 landlords by mydeposits and OME suggests that despite the destructive effects of the pandemic, there is a general optimism amongst them for the future of the BTL sector.
Several factors were covered in the survey including regulation and government support, how the market has been affected, the challenges that have arisen from the pandemic and the relationships between landlords and tenants.
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The survey also disproved the stereotypical bad relationships between landlords and tenants, showing that in fact 60% of landlords and their agents related their relationships a 9 or 10 out of 10. In the reverse, tenants rated their relationship with their landlord as a 7.4 out of 10.
Many investors have been previously put off going into BTL sector due to the prospect of having to deal with turbulent landlord/tenant relationships, so the survey may make them more agreeable to entering the sector, but there could also be a good opportunity to capitalise on the current rental price situation.
The current view from 49% of tenants is that paying rent instead of a mortgage presents no value for money as rent prices are inflated, often to levels above the cost of a mortgage and takes up a large portion of their income, leaving them unable to save. The remaining 51% also recognised that the main reason they rent is because they are unable to afford the deposit for a mortgage.
Investors considering entering the sector may want to think about the issue of affordability and making a slight cut in rental prices to make your property more attractive to long-term tenants. You are more likely to avoid spells where your property is unrented by making it more affordable.
There would be an expectation the rental arrears would be a common complaint amongst landlords for 2020 due to the pandemic, but surprisingly, and with the assistance of mortgage and rent breaks most households were able to keep up with their expenses and with 95% reporting that they were on top of their rent and bills. Of those who did struggle to pay, 58% reported that their landlords were accommodating with 31% offering some form of assistance.
On the contrary, 31% of landlords said that they had experienced problems receiving rent during Covid in 2020 and their tenants were in arrears.
With the property market booming and the UK well on the road to recovery with the roll out of the vaccine, many investors are seeking entrance to the rental sector.
If you want to know about a Buy-To-Let mortgage, Contact one of our advisors today and we’ll help you find the best solution for your requirements.