A Second Coronavirus?

Will There Be A Second Coronavirus Wave?

And What Will It Mean For Buy To Let Landlords?

If things hadn't been bad enough they could get worse if a second spike of Coronavirus breaks out. Yes we are living in very unpredictable times with this in mind the rental market is no exception. Managing risk has just got a lot more trickier to control having said that most of our fully managed properties over the lock-down period and beyond hasn't expierenced the ramifications of financial implosion caused by tenant harship in spite of our duty of care under govt guidelines to write to them. Asking them if they require help with rent reduction and repayment plans for deferred rent - which is good.

At the same time with similar properties on the market prospective tenants are making offers. This is more indicative of the market we find ourselves and evidence that the pendulum has swung in the tenants favour. And Landlords are continuing to drop their asking prices in order to attract tenants and avoid the possibility of losing them and having an empty property on their hands if lockdown restrictions are tightened again. We are finding that new instructions are up 33% in June from May, offers are up from 48 and agreed tenancies 52 per cent respectively.

There has been a lack of corporate relocations and international students, causing rents to drop by an average of 10 per cent. For any Landlords who rely on the student market this isn't a very good time to be letting out their properties to this type of tenant.

Fear of Second Coronavirus is Heightening Activity for Tenants to Move Quickly!

Many tenants are keen to act quickly and find a new property more suitable to lockdown conditions in case of a ‘second wave’ of COVID-19 cases. And as mentioned above Landlords are continuing to drop their asking prices in order to attract Tenants. For those Landlords who aren't sure about where they stand it's good to be flexible with the rent in this current economic climate.

We are all hoping that there is no ‘second wave’ or another lockdown situation, but these are unpredictable times and you just dont know what's going to happen. We hear the media saying that the economy is heading out of this with a V Shaped Recovery, but chances are less likely of this in my humble opinion. I think there's worse to come. And therefore, I would advice Landlords to take the better "safe than sorry" approach and secure new tenants even if it means getting less rent, it's better to ride-out the rest of the pandemic storm with less rent instead of an empty property....

How Is Recovery Going To Look Like If We Have a Second Coronavirus Outbreak?

And whatever side of the economic argument you hold about the recovery is it V Shaped, U Shaped or even L Shaped, one thing is for sure Landlords have more risk behind finding tenants and making sure they also pay their rent without any arrears. The L Shape recovery is the worse case scenario because it's characterized by persistently high unemployment, a slow return of businesses investment activity and a sluggish rate of growth in economic output. And are associated with some of the worst economic episodes through history. Risk is high and i would advice all landlords to look at rent guarantee protection.

Why Rent Guarantee Protection?

Short Answer: Unemployment

Which is why Landlords need to start safeguarding their interests with additional insurance cover.

These are precarious times with unemployment rearing its ugly head already this morning the BBC news announced that number of workers on UK company payrolls fell by 649,000 between March & June. And the number of people claiming work related benefits last month including the unemployed was 2.6m. These numbers are set to rise when the government backed furlough scheme comes to an end and a large number of firms start laying off employees because the economy is just not performing and the customer demand isn't there.

Feel free to drop me a message or email and let’s arrange a time to chat about any challegnes you currently face when it comes to buy-to-let … because what have you got to lose? May be15/20 minutes of your time to get great insight and inside track is worth it. Remember, the choice is yours!

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