Covid will drastically change rental landscape warn leading agents
A series of leading lettings agents have warned that the rental sector is set for significant change as the Coronavirus pandemic changes tenants’ and landlords’ aspirations.
Speaking to Assist Inventories, the agents suggest attitudes to property type, location and quality will all change in the near future.
Simon Shinerock, chairman of Choices, is critical of the way Build To Rent has been promoted by government, to the detriment of private landlords who have been heavily taxed and discriminated against.
He says: “As things stand, we will see more and more small, undesirable, built-down-to-a-price apartments and less and less family homes available to tenants. This policy has been revealed as even less relevant by the pandemic because, whereas in the past, people went to live where the jobs are – now the jobs can often be done from anywhere and people will increasingly choose to live everywhere.”
Yasser Elkaffass, managing director of Adam Hayes, says the working-from-home phenomenon witness last year will continue into the future.
“Buyers and tenants are increasingly realising that their current homes are not ideal for their new lifestyle. Small families now need a garden – and a second bedroom is now needed for the bachelor who works from home” he says.
Elkafass says this could mean a surge in rents but, if the wider economy deteriorates as feared “tenants, especially in London, will find it difficult to pay their rents and landlords will have to show flexibility in reducing rental prices or finding new tenants.”
Ross Nichols, co-founder of Just Move In, says the year ahead will be tough on landlords because of fiscal and regulatory challenges.
“Some [landlords] will get squeezed out by Build To Rent and changes to carbon monoxide and energy performance regulations could hit a few in the pocket. Perhaps the biggest cloud is the Office of Tax Simplification’s recommendation to increase Capital Gains Tax whilst simultaneously lowering the annual allowance dramatically. If this comes then many landlords, especially smaller ones, will run for the hills.”
Nick Neill, managing director of EweMove, is less pessimistic and says that there remains one overriding reason why landlords will continue to prosper.
“What remains constant is the critical lack of rental supply – or property supply generally for sale or rent – which means the longer-term outlook for landlords remains positive as far as capital growth is concerned. And as long as any profits made are not taxed too heavily in the future, this will remain an attractive option for many, especially when interest rates remain low and capital growth remains high, as highly leveraged property purchases earn the landlord much more than the return on the deposit value alone might, in other investment vehicles.”