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TODAY'S OTHER NEWS

Coronavirus fall-out will slash rents by 5% or more - warning

There’s a warning this morning that the consequences of the Coronavirus crisis mean that rents will fall at least five per cent between now and 2024.

PropTech start-up Home Made has made the claim after analysing rental value trends after the Global Financial Crisis just over a decade ago.

It’s then applied these figures to 2020 to predict the size of the upcoming hit to the rental economy. It projects that rental income won’t be back to pre-Covid levels until early 2024. 

London is expected to be the most impacted region, with a rental income decline of at least nine per cent or £3.9bn in losses for the capital’s landlords by the time pre-Covid prices return – with Westminster, Tower Hamlets and Wandsworth hit the worst.  

“Landlords across the UK need to brace themselves for reduced returns. In a recession, renters with tighter budgets are less inclined to take a risk and move homes due to reduced disposable income and increased job market uncertainty which drives rents down - and the Covid-19 recession looks likely to hit harder than any in living memory” according to Asaf Navot, founder of Home Made. 

“Landlords can protect themselves by acting fast and securing longer term tenancies with their current renters, or alternatively by reacting quickly to the pent-up demand on the new rental market following lockdown." 

"Landlords can also choose to prioritise long term income over short term gain by offering rent reductions for lengthier contracts, guaranteeing greater financial certainty." 

“Also, consider what else can be done to make properties more attractive to renters in the ‘new normal’. Highlight any outdoor spaces, consider allowing pets in the property - pet owners stay around 80 per cent longer in a rental property - and adjust the space for home working. This will all help you stand out and let your property in a slower market. 

“We’re yet to see the full extent of the recession and it’s likely to be a renters’ market for the foreseeable future, but this is far from doomsday. The good news is rental property is a more robust investment than others in a recession, protected from the extreme peaks and troughs of the sales market  as people still need to rent homes, even if they’re cutting on other costs such as travel and leisure.”

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    Lettings is the safest industry in the market today. Citizens may not buy plane tickets, go to the cinema, or buy a new home, but they do need to rent somewhere.

    Paul Barrett

    Lettings are far from being a safe industry.
    If that is what you think then you clearly haven't been paying attention to all the attacks on LL since 2015.

    In fact it is a an extremely risky industry for LL especially those with mortgages.
    It makes far more sense to sell up or change business model from long term AST lettings which are now fraught with many dangers.
    LA don't suffer the risk of bankruptcy like LL with rent defaulting tenants.
    The industry has never been as dangerous for LL since 1996.

    Rents simply cannot reduce as at levels they are just about cope with all the cost burdens that LL are subject to.

    Rather than AST lettings it seems FHL have a lot going for them and they DON'T need LA though perhaps FHL management is something LA should get into.

    The continued assault on AST LL means it makes little sense remaining one except perhaps if unencumbered where even with rent defaulting tenants there is no risk of lender repossession.
    Lettings on long term tenancis are very dangerous for LL due to all the anti-LL Govt regulations and policies made even worse by the most ridiculous eviction policies yet devised by stupid Govt.

    Never before has the PRS been subject to so so many ridiculous and iniquitous policies.
    The PRS especially for the leveraged LL is one for getting out of than getting into.

    I intend to get out as soon as I can!!

     
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    Just let two of my flats at increased rents.

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