Surveyors’ monthly BTL market update – March 2021 

Neil Smith, Head of Paragon’s Surveyor department, tells us how the buy-to-let market has shaped up in March, highlighting some localised trends using input from his team of regional surveyors.  

Overall, we have seen a good, stable property market in March, with activity picking up after the Stamp Duty holiday extension announcement at the start of the month.  

Almost all letting agents report being busy and, in many areas, demand is exceeding supply. A stand-out example of this is South Yorkshire where our regional surveyor says the rental market is ‘generally booming’ and agents are receiving multiple applications for properties across all house types and from all age groups. 

Despite the high demand and low voids widely reported, landlords are actively seeking to keep good tenants with some showing flexibility and resisting rent increases or offering incentives like free Wi-Fi at tenancy renewal. 

Outside space continues to be an important consideration for tenants. Tenants who may have been happy in a flat or HMO before the pandemic may now be opting for single residential units as these have been identified as property types in demand by our surveyors in East Anglia and the North Midlands, where they are helping to keep the lettings markets buoyant.  

We have seen continued strong demand in commuter towns with rail links to London as city workers switch more to working from home with occasional commutes. Despite this, there is a consensus among landlords and developers that London will continue to attract younger tenants. It is also expected that demand will be boosted with the return of the hospitality sector because a significant proportion of those employed in centrally located restaurants and bars live in privately rented properties. 

The condition of property is also a common theme.  

In the South West for example, positive demand is driving investor appetite for good quality HMOs, targeting both student and non-student tenants, within established towns and cities such as Bristol, Bath, Exeter, Cheltenham and Gloucester. 

The student market is performing well overall, especially those properties of a higher standard now that students are having to spend more time within their own accommodation. Our regional surveyor in Wales tells me that many good quality HMOs in Cardiff and Swansea have already been let for the next academic year; the same is said of Manchester by our surveyors in the North West.  

The holiday let market is strong due to the expected “staycation” boom and risks in booking flights abroad following news of rising cases of Covid-19 across Europe. As you would expect, this is concentrated in areas which attract tourists, with coastal and rural areas proving popular. Holiday lets throughout the North East region are in very high demand with little availability already once the restrictions are lifted. 

This is leading to multiple reports of investors expressing an interest in entering this market. 

Increasing numbers of investors are looking to re-mortgage. Reasons for this include acquiring additional stock, upgrading or refurbishing existing properties or releasing equity as part of a longer-term strategy.