Covid pandemic spurs Buy to Let investor growth

A report released this week has pointed to a mini-boom in the rental property market that’s being spurred by the Covid-19 pandemic as tenants re-evaluate and reassess their housing requirements.

According to the latest Rental Market Report by online property portal, Zoopla, overall demand for rental properties has risen by 21%. More telling is the fact that rental homes are being snapped up by tenants 30% more quickly than they were this time last year. Further research conducted on behalf of Paragon Bank, has revealed 42% of landlords in the South East reported growth in tenant demand – compare that to just 10% in central London and it’s clear that good quality rental property is at a premium in the right locations.

The Zoopla report points to a ‘once in a lifetime’ opportunity to rethink the work/life balance, the commute and a potentially permanent shift to a working-from-home lifestyle. It’s unsurprising then, that properties in commuter zones or well-connected towns are top of the list when it comes to priorities right now. Tenants are pursuing larger properties, with more space indoors to accommodate home office space and outdoors too – to satisfy a growing need for personal wellbeing, exercise and mental health.

Highwood’s North Stoneham Park development has proved particularly popular with Buy to Let (BTL) landlords who, according to Paragon Bank, are feeling increasing confident about their rental yields, their capital gain and the UK private rented sector than they did in 2019.

The range of house types at the Park gives landlords plenty of scope to invest in a low-maintenance, tenant-ready BTL option, with affordable two, three and four-bedroom homes that are set within one of the most commuter-friendly locations on the south coast. If tenants need to go into the office, a walk through the former deer park to the railway station or a hop onto the motorway brings it within easy reach.

Favourable long-term property values

When construction first began at the Park, Helen, a homeowner from nearby Chandlers Ford, decided to invest in two new properties in Avenue Park because the popularity of the new community setting for renters made sound financial sense.

‘I loved the appeal of the Park and its setting,’ she explained. ‘Who wouldn’t want to live in a new home with a beautiful landscape all around you? It’s a wonderful place for people to live and, with mortgage rates, rental values and long-term property values so favourable, I decided to invest here.’

Helen invested in two, two-bedroom homes at the initial Avenue Park phase and both were rented quickly. Indeed, the exercise was so worthwhile that she recently added to her portfolio with further properties in Homewood Park that, again, were snapped up by tenants keen to move to the Park.

Example Buy to Let illustration

Two and three-bedroom homes are traditionally considered the most secure in terms of a BTL purchase and with rates as low as 1.19 % fixed for two years with The Mortgage Works, there’s never been a better time to take a consider an rental property investment. We asked Charters Financial Services, the Park’s recommended mortgage advisor, to provide an illustration for a 3-bed Harewood, which are among the most popular homes for landlords and tenants at North Stoneham Park.

Example Buy to Let mortgage illustration:

Harewood plot 178 purchase price: £375,000
Less deposit (25%): £93,750
Buy to Let mortgage (25 years): £281,250
Your monthly repayment*: £398.20

If you’d like to explore your options and find out more about the most suitable private rental properties for Buy to Let investors at the Park, visit the Park’s Homes pages or contact Highwood’s Sales Team on 023 8001 1620.

To download the full UK Rental Market Report by Zoopla, please click here.

*This illustration is provided on the basis of an Interest Only mortgage over a 25-year term on a two-year fixed rate of 1.69% with a £1,499 arrangement fee.

This is an example rate; these vary daily so this illustration does not constitute an offer. Mortgage is subject to full underwriting, affordability and credit scoring via the lender, this rate and product was valid at point of printing.

A MORTGAGE IS A LOAN SECURED AGAINST YOUR HOME. YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE OR ANY OTHER DEBT SECURED ON IT.

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