Keep track of changing tenant priorities
Many factors continue to impact the current residential and BTL markets. Stamp Duty changes have accelerated activity within the purchase market and the lockdown period has challenged the way that people are living and working which is leading to a number of questions being asked of FTBs, homeowners, landlords and tenants.
Will the attitudes of the younger generation change towards the huge commitments necessary for getting onto the housing ladder? And will the homeownership dream even be achievable for the younger generation in the current economic climate? Could this combination of factors lead to even more people becoming reliant on the rental market?
This final one is the big question for landlords, and this could well be the case amidst ongoing concerns over the precarious nature of many people’s short and medium-term employment status. Priorities are also changing for tenants, with more people focusing on properties with gardens and space to work. Research from BDRC BVA and Paragon showed that a fifth of landlords said a property with a garden was top of their tenants’ list of requirements in response to Coronavirus, followed by properties with a space to enable them to work from home (15%) and a fast broadband connection (12%).
The research also revealed that 36% of landlords looking to acquire new property over the next 12 months would target a semi-detached house, up from 33% during the same period last year. In addition, 12% said they would target a detached house, compared to 9% in Q2 2019. Demand for terraced housing remained steady at 50%. Additionally, landlords with larger portfolios are said to be more likely to report tenants demanding outside space. Just under a third of landlords (32%) with 20+ properties in their portfolio said that tenants were prioritising outside space, falling to 20% for those with two to three properties.
There will undoubtedly be a seismic shift in rental attitudes and needs post lockdown, and landlords must be fully aware of any implications on potential yields. Adapting to what will undoubtedly be described as the ‘new normal’ will be easier for some landlords and tenants than others, but the fact remains that the importance of the private rented sector will only continue to grow and it will prove to be the backbone of the property market in the coming months and beyond.