COVID-19 has had a significant impact on the property sector, with landlords the hardest hit. According to one report, 65% of landlords have suffered financially during the pandemic as a result of changing government legislation to protect renters and temporarily ban evictions. As the tides begin to turn and the rental market grows, it’s vital that you get to grips with changing consumer behaviours and demands to maximise rental yields in the years ahead.
After spending many months cooped up indoors, renters now seek out different qualities when looking for their next property. Below, we’ve rounded up some of the biggest changes.
The COVID-19 pandemic has demonstrated that workers don’t need to be in the capital to be productive, and as a result, brands including Microsoft have said staff can work from home permanently. As a result, asking rents outside London hit a new record high of £964 per month. New data from Rightmove shows that asking rents are up 4% in the South East and at least 3% in the North East - in London, on the other hand, rents are down by 3%.
Last year, the most in-demand property type to rent was a studio flat, according to data from Rightmove, but now two-bedroom houses have overtaken studio flats, followed by houses and bungalows, as renters look for spare bedrooms so they can comfortably work from home. When looking for your next buy-to-let investment, consider the pros of two-beds.
In recent years, renting has become a lifestyle choice for many, and the norm in younger generations. But the pandemic has changed consumers’ attitudes towards homeownership, with tenants preferring the flexibility of renting. Data shows renters spend around 27% of their income on rent, and it’s not just the young who are making the switch. An increasing number of over 50s are entering the private rented sector, now accounting for 15% of rented households. Look for opportunities in new areas and property types to maximise your yield. In the months and years ahead with economic uncertainty, renting will grow in popularity.
Tenants prefer receiving reminders over rental income over phone calls and emails, according to a new report. Communicating via text not only saves time and resources, but it meets the demands of modern tenants, who don’t want to receive phone calls from landlords or letting agents. Data from Mobilesquared found that 99% of all text messages are read and 90% are read within 3 minutes, making it one of the most effective communication methods. It’s also more convenient and cheaper for landlords or letting agents; no voicemails needed!
A report from SpareRoom found that tenants are increasingly favouring properties with patios, balconies and gardens, so they can have some outdoor space to exercise, relax, and entertain. After months of being stuck indoors during the lockdown, it’s clear that most renters want to be able to spend some time in the fresh air - and they’re willing to pay a premium. Searches for properties with gardens are 98% higher than the same time last year.
Another report found that demand for properties with bike storage had climbed more than 1,500% since March. As consumers spend more time exercising outdoors and choosing to bike to work rather than take a car, it might be time to adapt your rental accommodation to meet these needs. In areas where car parking is limited or expensive, installing a bike rack or shed could be an alternative and allow you to command a premium from cycling renters.
Another feature that’s growing in popularity in recent months is the demand for an en-suite bathroom, particularly in shared accommodation and HMOs. Consumers want to be able to both protect their health and have some privacy when sharing a house with others, and so installing en-suite bathrooms can have a big impact on monthly rental. Many landlords have also converted living rooms into more bedrooms to increase their profits, but living space is another growing feature renters look for when searching for rental properties. Generally, the pandemic has had a negative impact on demand for HMOs, with consumers less willing to share with strangers, but properly pricing your offerings and adding en-suites could help.
How has your rental business changed since the beginning of the pandemic? Let us know on LinkedIn and check back soon for more advice on running a successful business.