Over the course of the pandemic, we saw the rental market become exceptionally busy. Time to let fell to extreme lows and demand for rental properties outstripped the supply, putting upwards pressure on rental prices. But the face of the rental market is changing yet again. After a tumultuous 2020 and early part of 2021, foreign travel is making a return and the stamp duty holiday has come to an end. The Autumn is sure to bring more changes as the market continues to evolve in response to the developing ‘new-normal’. Here are Liquid Expat Mortgages’ predictions for the UK rental market in the rest of 2021.
City Centres Will Continue to Grow in Popularity.
Since the relaxing of lockdown and the rollout of the vaccine programme, people have started to return to city centres while looking for rental properties. UK expats and foreign national investors have also started to return back to the UK for work, study or personal reasons.
City centre yields have risen from 4.7% in 2020 to 5.3% in 2021 as renters start to return to the city centre. We have noted this return before. However, this is a trend we’re sure to continue tracking as it continues throughout the remainder of 2021. Rents in London recovered by almost 5% between April and June 2021. With international travel becoming more common and more accessible, rents in London will only grow stronger for UK expat and foreign national investors looking for property in the capital over the coming months. Lenders have created many new products to attract UK expats looking to purchase property back in the UK. These investors stand to profit from slightly depressed prices in the UK capital and the inevitably rising rents. In the rest of the country too, city centres present a strong investment prospect for UK expats and foreign nationals, with the average rental yield in cities outside of the capital rising from 5.9% to 6.2%. This explains the increased demand for UK expat mortgages coming into our enquiry funnel.
The rapid growth in demand for city centre rental property in the UK after Easter was a strong indicator for the continued demand that we have seen – and will continue to see – in 2021. Edinburgh experienced a surge of 26% in demand after Easter, with Leeds and Manchester experiencing a 12% and 5% rise respectively. UK expats and foreign nationals who manage to get ahead of this trend now stand to make strong returns throughout 2021 and long into the future too as the long-term rental property becomes increasingly normalised within today’s culture.
With a principled plan for combatting Covid throughout autumn, the return of social venues like bars and restaurants, and a strong and continued uptake in vaccines, UK expats really should be looking at city centres for accessible property, strong rental yields and capital growth. Lenders have remained bullish despite the pandemic and continue to forecast growth. They are also making a wide range of products available to meet with expat mortgage needs across buy-to-let, residential, company buy-to-let, and the growing holiday-let mortgage marketplace.
Family Homes Will Continue to be Popular.
UK expats and foreign nationals also need to pay continued attention to family homes when looking for a rental property. Family homes were one of the big winners during the lockdown housing market – seeing record price rises and quick uptake. But this trend is going nowhere as people continue to seek out more space. Family homes that are fitted with modern fixtures, period family homes, outdoor space, and office space are also of particular interest and sure to garner even more value.
Family homes will also continue to be profitable for UK expat and foreign national investors too, as the supply of family homes in the rental market remains low. The inflated price of family homes contributed to many landlords selling this type of stock to capitalise on the strong growth. This means that there are far fewer family homes in the rental market than pre-pandemic, which is contributing to upwards pressure on rental prices. Another factor contributing to these high prices is the consistently high rate of tenant renewal for this type of property – meaning that supply continues to remain low.
Commuter Belt Properties to Stay in Demand.
With extremely low stock on country rental properties and city centres opening again, commuter properties are set to be extremely popular throughout the remainder of 2021. For those looking for increased space but unable to rent in the country, commuter properties provide the perfect middle ground for renters who find the city centre too small but still want to experience all the city has to offer. When looking for an investment property in this area, proximity to green spaces and extra rooms that can serve as an office to facilitate home working will add value and desirability to your rental property.
Liquid Expat Mortgages
Unit F2, Waterfold Business Park,
Bury BL9 7BR
Phone: +44 (0) 161 871 1216
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