Since the start of the Coronavirus pandemic many businesses, sectors and industries have been negatively impacted in ways that no one ever could have predicted, none more so that the property market, both residential and commercial, specifically the buy-to-let industry.
However, with the UK lockdown, and rules regarding businesses and social distancing, easing and the COVID-19 pandemic slowing the buy-to-let market has begun to recover over the last few weeks and looks set to continue to do so over the coming months.
Whilst it may be a while before everything resumes as normal, this slow but steady recovery is a positive sign for investors as well as landlords yet it is likely that the market will have changed vastly in a post COVID-19 world.
How has the buy-to-let market changed?
During the month of March, according to landlord today, hundreds of buy-to-let mortgage products were removed from the market due to the Coronavirus pandemic. This was detrimental to buy-to-let landlords who struggled to get mortgages as the COVID-19 pandemic worsened.
In fact, many landlords found it difficult to obtain the relevant mortgages required during the Coronavirus pandemic and fears of falling property prices led to entire products being withdrawn mid application.
That wasn’t the worse of it however, and the buy-to-let market was further impacted by the lack of demand from tenants.
Throughout the months of March and April, when the Coronavirus pandemic was at its peak, many tenants could not afford new rental properties even if they wanted to which also aided in the fall of the buy-to-let market in recent months.
How has the market recovered?
Between May and June 2020 buy-to-let product numbers have increased rapidly likely due to mortgage lenders focussing on a mix of new and existing borrowers and buy-to-let landlords with long term views could benefit largely from the increase in mortgage options.
Furthermore, according to Moneyfacts, the choice in mortgage products has increased, and some higher loan-to-value (LTV) average rates have reduced.
In addition to this, a recent survey from Rightmove, conducted at the end of May revealed that, compared to the same period last year, demand from tenants for rental properties had increased 33% which will be welcome news to landlords, especially in the current climate.
However, whilst this recovery is good news for investors and landlords alike, the true economic impact of the COVID-19 pandemic is yet to be realised which means that the future of the buy-to-let market is still relatively unclear.
With that being said, there is the ability, for those who are able to, for landlords and investors to expand their portfolios by capitalising on the reduced and falling property prices. If those investors and landlords do decide to capitalise on current events, it is recommended that they do so quickly due to the steady speed at which the market is recovering.
It would also be beneficial to seek the relevant financial advice from an independent adviser who has a better understanding of the options available to them in the current circumstances.
Ultimately, the buy-to-let market, as mentioned previously, is still rife with uncertainty which can cause problems for landlords and investors, and, whilst this steady recovery is expected to continue, it is essential that you continue to monitor the current situation of the market and economic climate as well as any new rules and regulations put in place by the government or other authoritative bodies.