How the pandemic has influenced the motivations of landlords

Paul Fryers

September 22, 2021

Paul Fryers Zephyr

Paul Fryers is managing director of Zephyr Homeloans

The arrival of the pandemic in the UK 18 months ago, and the subsequent economic disruption, had an impact on almost every aspect of life, including property investment.

This included a significant shift in lifestyles among tenants: with some moving out of city centres into less urban areas – or to homes with bigger gardens or enough room to work remotely on a long‑term basis (the so-called ‘space race’).

As a result, many were surprised by how resilient the buy-to-let market has proven to be for much of the last year and a half; a durability that was reflected in the results of a recent survey of landlords by The Deposit Protection Service (The DPS).

Despite challenging circumstances, a third of those who responded said that they had either made a property purchase during the pandemic or were planning to soon.

For landlords with fewer properties, a key motivating factor for purchasing seems to have been the government’s stamp duty holiday on properties up to £500,000 (which was ‘tapered’ until the end of September). 30% of survey respondents with a portfolio of one to three properties said their purchase was inspired by the discount, with the figure being 25% among those who owned four to eight.

On top of this, a significant proportion of landlords seem to be looking to the horizon, with 18% of respondents with one to three properties and 21% of those with four to eight properties citing ‘long-term investment’ as a reason behind a purchase – and some indicating in comments that they were at least partially looking to fund their retirement.

The findings underline overall how important it is for brokers to understand what is motivating their clients to ensure they are best placed respond to their needs.

For example, we will have to wait and see whether those landlords who let out properties to ‘staycationers’ over summer will now convert them back to rental during the coming months – as well as what impact this could have on the already tight supply of rental properties.

In a fast-changing market, providing speedy mortgage financing and a wide selection of loan options enables us and our intermediaries best to serve landlords currently facing portfolio-changing choices in an ever-evolving pandemic landscape.

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