Why now is the right time to grow your portfolio?
The property industry has changed significantly during the Coronavirus Pandemic in 2020. There’s a lot of uncertainty about a lot of things that affect landlords and investors, whether it's the housing market or the wider economic landscape in general. However, there’s some good news for landlords. In this post we look at why now might just be the ideal time to grow your property portfolio.
Increased rental demand, new Buy-to-Let products and low interest rates have made the property industry perfect for investments.
Covid-19 and the property market
The housing market reopened in May and with it came an improvement in the outlook for house prices, but industry experts predicted house prices won’t fall as much as they first thought. Despite this, May’s edition of the RICS Residential Market Survey found that overall sentiment remains cautious, thanks to the economic uncertainty caused by the pandemic.
Now’s the time to buy, which is good news for investors looking for a new opportunity. There’s also new hope in the rental market; if people are willing to wait longer for a purchase, the rental market is expected to have a slight boost.
So what does this mean?
Well, even a short-term dip in prices represents an opportunity for investors who have the capital to make the most of it. And with many house purchases on hold, cancelled or otherwise delayed, it’s a buyers market, making it the right time to invest. The key question is timing: investments should be timed to make the most of the dip, but have to happen before any recovery takes hold in order to make the biggest return. Rents are expected to continue growing this year and next, meaning the return on investment for those who time it right could be significantly higher than other investment avenues.
Review your current properties
It’s also a good time to review your existing rental properties, as recent times have led to an increase in the desirability of features such as gardens or balconies (81% of RICS survey respondents feel they will be more popular), and of homes located near to green spaces. Worth bearing in mind when taking stock.
Demand for Rentals
Of course, the latest developments come against a backdrop of what was already an attractive environment for landlords and buy-to-let investors to expand their portfolios in. Data from RICS shows that there has been a consistent decline in the number of new landlords in recent times, while demand for rental property has nevertheless remained largely steady. Despite there being fewer landlords, rental demand is as high as ever and is expected to grow further through the year. According to RightMove, demand for rentals is expected to increase 33% this year.
Financial advice for Buy-to-Let Landlords
There are now more mortgage products and deals available with great rates and incentives, making now one of the best times to start growing your property portfolio.
“For investors, the announcement of the stamp duty holiday has provided the perfect opportunity to buy, especially in the current climate where we have uncertainty. The relief applies until the 31st March next year and includes purchases up to £500,000.
When the chancellor made the announcement, we were approached by a number of our clients with property portfolios looking for help with their next purchase. Interest rates remain low with some of the lowest buy-to-let rates I've seen in recent years. There's a good selection of lenders and a variety of options available. So if you're an investor, now is the time to buy.”
Rhys Edwards, LIFT-Mortgages
Speak to the Specialists
30 years in the property industry has helped us understand the ever changing market and how to adapt quickly. Combined with the increase in rental demand and introduction of competitive mortgage deals we’ll be able to guide you to maximise the return of your properties and ultimately grow your portfolio. Speak to the team today.