How has Covid-19 affected the lettings market so far?

In short, the market in Hull has gone from strength to strength. We’ve noticed a significant upturn in agreed lets and new tenancies across the single homes and family lets. 

However, the HMO/rooms market which has been slow for some time now has gradually ground to a halt. Most foreign students haven’t come back to the area yet meaning the student properties have been left empty with some being rented by professionals and low skilled workers. 

5% mortgage announcement and how it’ll affect landlords:

In early October 2020, Boris announced that he would back 5% mortgages for homeowners which could have an impact on the rental market in less affluent cities. 

In Hull, a good quality 3 bedroom mid terrace property can be purchased from just £85,000.00. The requirement for a deposit under £5,000 will make the affordability of a mortgage within people’s reach. 

Of course some prefer the flexibility of renting and not having the liability for major repairs and costs. We will need to keep a close eye on the demand in the market in coming months.

How will house prices cope? 

There are two ways to look at this; 

• Values could drop. We are in the midst of a looming recession which could have a catastrophic impact on employment which has a knock on effect to the affordability of housing and success rate of mortgage applications. But, where there are losers, there are usually winners. Sellers may be forced to reduce prices to get sales over the line.
  
  
• It might be a good thing for the industry. For those with surplus cash there could be some property bargains to snap up in the down market. We may also see quantitative easing measures put in place by the government which would lead to inflation, resulting in wage rises and property values increasing whilst borrowing levels stay the same and those with existing portfolios could do very well out of it.  Hull hasn’t seen a big rise in property values for about 13 years either so it’s more likely that a bad market would only stagnate the prices rather than dropping them.

The property market will always have it’s highs and its lows, how we react to them determines how successful we will be in the industry. In previous recessions the market has always bounced back in the end and gradually property prices and rents have always risen over the decades.

For advice on specific investment hotspots, or letting demand please feel free to contact me on spencer@ultralets.co.uk or 07808 549892.