The ingredients for a booming rental market
The choice between homeownership and renting is an age-old debate. A huge number of considerations will always need to be taken into account when attempting to reach a conclusion, and the current economic environment continues to throw even more variables into the mix.
The recent changes in stamp duty have naturally bolstered the purchase market but first-time buyers have also been hit with a double whammy as the availability of low-deposit deals has plummeted, while rates on those remaining have surged since lockdown. According to research from Moneyfacts, the number of mortgage deals for borrowers at 90 per cent loan-to-value has fallen from 1,184 before lockdown to just 78 – at the time of writing – while average rates for a two-year fixed in this category have surged by almost 1 percentage point from 2.57 to 3.54 per cent.
The availability of lending at high LTVs is likely to remain narrow for some time and with many repercussions of the pandemic still unknown – in terms of how income streams and future job prospects will be impacted – many FTBs are faced with the inevitable choice of renting for longer. This means there will be an even greater emphasis on landlords and the private rented sector moving forward. And with emphasis comes opportunity.
We are in a period of time where many landlords are well positioned to take advantage of some unusually beneficial tax conditions, strong levels of rental income and sustained tenant demand. And it’s little surprise that many landlords are using this combination of ingredients to grow their portfolios.
So, if you’re looking to gain a better understanding of how to grow your portfolio in these uncertain times then why not speak to one of our advisers today by calling free on 0800 170 1888.