It might seem that the writing on the wall spells doom for the UK real estate market after a tough 2020, but many experts are offering reasons to rejoice. If all those tiny storms are weathered, the next few months could be really promising for the entire sector.
David Alexander, the managing director of the property platform Apropos, says that the market has started reaping the benefits of the fact that tenants want to live in the countryside instead of urban dwellings. Consequently, the demand for properties in popular non-city limits is high, and so are the rents in such vicinities.
Are we going to see sustained growth?
While there is no clear indication of how long this growth in the private rentals sector is going to last, there are many reasons for us to be optimistic.
For starters, long-term rental options would fall short of meeting the demands once the holiday lettings sector recovers from the COVID-19 impact. With the UK planning to vaccinate every adult by mid-2021, pent-up demand for options such as staycations is expected. Most holiday operators are going with the assumption that people wouldn’t be keen on travelling to other countries where vaccination programs are seen as ineffective.
How will Brexit impact this run?
Brexit is now a done deal, and it remains to be seen if there is a ripple effect in the UK rentals market. Tens of thousands of EU citizens reside in the country and make up a sizable chunk of the private rentals sector. In case of a sudden reduction in this figure, a number of properties could end up being vacant and rental rates might take a hit in the short run.
Will it do enough to make up for the economic struggles?
The next pertinent question to ask – can the bounce-back cover the losses of the previous year and do enough to overcome the challenges imposed by this one? The recent trends have shown some light at the end of the tunnel for buy-to-let and mom-and-pop landlords.
From a broader perspective, there has been a 4.7% growth in the sector across the first three quarters of 2020. A survey by RightMove, a top real estate aggregator, suggests that the average rents are up by £974 when compared to 2019. With less dense areas like Wales doing better when compared to previously hot locales like Greater London, a clear shift in trends and tenant preferences can be seen. Moreover, the UK government is strategically opening its doors to bring in expats and those aspiring to get a British passport from countries like Hong Kong.
On the contrary, a few experts are hedging their bets on the other end of the spectrum with the fear that the housing market may collapse anytime.
All in all, the industry wizards and laypersons would be at a better position to tell which way the sector is going after the stamp duty holiday ends and the vaccination program runs its course later this year.
