Despite a less optimistic outlook in Central and Greater London which skews the overall numbers, 39% of landlords surveyed by the NRLA and research consultancy BVA/BDRC reported an increase in rental demand – an 8% improvement since their Q1 report.
While the full economic impact of the pandemic is yet to be discovered, the relaxation of lockdown rules has buoyed the economy and led to the highest rental demand, according to the research, since the first quarter of 2016.
While the data is partially skewed by negative outcomes in Central London, the NRLA report indicates that all other areas have seen real-terms increases in rental prices and in demand for rental property as the capital experienced a fall in both.
Despite this, the proportion of landlords indicating an intention to purchase a property has fallen from 19% in Q1 to 14% in Q2 while those aiming to sell has increased from 17% to 20% in the same time – likely due to landlords reacting to new and upcoming regulations that have been considered to unfairly target the private rental sector.
The NRLAs Policy Director, Chris Norris, said:
The evidence is clear that nationally whilst the demand for homes to rent is increasing, landlords are more reluctant to invest in new properties. The only losers will be tenants as they struggle to find the homes to rent [that] they need. The Chancellor needs to recognise the harm being done by tax hikes imposed on the sector.
It is clear that there is a significant flight of tenants from the capital in response to the COVID pandemic. With lockdown restrictions having ended, and offices beginning to reopen, the jury is out as to whether this trend will continue.
In addition to the increase in rental demand, Wirral landlords will also be pleased to note that homes in the region have continued to increase in value even as some of the driving forces behind increases throughout 2020 have reduced.
BTL properties values in the North West have increased by 15.2%, according to Sequre Property Investment, outperforming residential properties. SPIs Sales Director, Daniel Jackson, said of the results:
We’ve seen more and more investors within the buy-to-let space opt to invest outside of London due to the more favourable yields on offer and, as a result, the North West has been performing very well in recent years.
While some of the focus of investment has shifted to the North East, which is also able to provide excellent yields from investment in BTL properties, there is every indication that the North West, and specifically Wirral, are drawing investors north from the capital.
What this means for Wirral Landlords
There are plenty of reasons to be optimistic as a Wirral landlord – while there are doubts surrounding aspects of recent legislative changes, the rental sector seems to have been reasonably well insulated against the economic uncertainties of the pandemic so far – and contrary to fears, there has actually been a fall in the percentage of tenants with arrears during the pandemic.
With significant pressure building on central government to provide help for landlords looking to improve the energy efficiency of their properties, and Wirral an increasingly popular destination for new home workers leaving surrounding cities, the next year to eighteen months could see a continuing upward trend (though likely shallower) in the value of property as well as the demand for it. For that reason, though properties in the area are more expensive than prior to the pandemic, investment in the area still seems the wiser choice for the short term.
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