With so much in the media at the moment relating to the housing market and private rented sector prices, it can be hard to decipher what is really happening in the rental market in Benfleet and the rest of Essex. I have spent some time digging through the research done by the NRLA into the National Landlord Confidence Index for Q2 of 2020 and have found some pretty interesting results for Essex and the South East.
I've broken out the main findings here, and what we can conclude from them for the future of the Essex rental market. To me the findings look primarily positive, with property being as ever one of the more solid places to invest your hard earned money.
1. Landlords in Essex are much more confident than those in London.
Up to 2x as confident in fact! With so many workers leaving the city and abandoning their daily commute, even despite Boris's protestations, it looks likely that the appetite for city living will be quashed for a long time to come. Many workers when they do return, will spend fewer days in the office and more time working from home, so rental demand in Essex is likely to skyrocket as people weigh up the longer commute time against having larger homes, more green spaces, cleaner air and a better quality of life. Inner London landlords are feeling the strain more than any in the UK, with their confidence being the lowest reported, closely followed by Outer London.
2. Landlords in the North are more confident than the South, except for in Essex
According to the results, landlord confidence increases as you travel north, with the whole of East Anglia being a bit of an anomaly, with higher confidence levels than the East and West Midlands. Could this be because of the traditional stability of house prices in the region in comparison with other parts of the UK, or the high rental demand which looks set to increase (see point 1)?
3. Essex Landlords are the 3rd most confident in the UK
Only those in the North East and North West are feeling more confident than East Anglian landlords right now, and with the soaring capital growth they've enjoyed in recent years, many are likely to be buoyed by the healthy equities they are sitting on.
4. Around 15% of Landlords are considering selling some of their portfolio, whilst only 10% are considering adding to it
Whilst there is lots of uncertainty still in the market, this could present some opportunities for shrewd investors looking to expand their portfolio. Add to this the changes to SDLT (remember that landlords will still pay 3% above the residential rate), and there may be some bargains to be had. Going on into Q3 it's estimated that up to 25% of private landlords in the UK could be looking to downsize their portfolio.
5. Rents in Essex will rise to reflect demand
Supply and demand is something none of us can ignore. Whilst up to 72% of landlords plan to freeze rents for existing tenants, and no doubt wish to avoid potential void periods or worse, tenants who build up arrears, a further 18% plan to increase rents. Usually this will be when a property is relisted for new tenants. There is still much uncertainty around how many jobs might still be cut when the dust settles, but with many applying for UC and LHA as a result, it's too soon to tell what effect this could have on landlords, if any.
If you feel your portfolio needs a review, or are not sure what your next move in property should be, I am offering a free portfolio and rent review to landlords in Essex. Call today on 01268 955001 to arrange your review.