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How will the buy-to-let market look post-September?

Russell Gould is an ecommerce specialist, chief executive of Vesta, advisor to fintech and proptech start-ups and is a mentor for Cambridge Judge Business School’s Masters in Entrepreneurship

The global property market is facing unprecedented challenges as it battles against the consequences of social policies aimed at reducing COVID-19 infections.

In the UK, physical viewings and surveys have been prohibited, banks have tightened mortgage lending criteria, tenant evictions have been banned and many transactions have been put on hold.

When HM Government’s isolation policies will end, and the UK property market return to normal, is anyone’s guess… three weeks, June or six months’ time are dates that have been (hesitantly) mentioned by politicians and epidemiology experts, but it’s clear that no one really knows.

The UK has recently come through another period of uncertainty due to Brexit and the general election. This dampened the UK property market, with owner-occupiers not willing to pay a premium and investors holding back from deploying capital.

The result was significant pent-up demand (something we were only too aware of), and the recovery that rapidly began to take hold in January and February of this year – the so-called “Boris Bounce” – highlighted that some investors were better prepared than others. From this experience, rather than trying to guess when the market might recover, we have assembled some ‘top tips’ to help make sure you are well positioned for the bounce post COVID-19:

Surround yourself with specialist advisers

Make sure you have your power team ready.

Firstly, a strong mortgage broker who is highly experienced in BTL and HMO financing is key. Too many times we see deals fall over because of financing issues and unfortunately a less experienced or weak mortgage broker will often be the cause of the problem. A common situation is when an investor claims to have a mortgage agreement in principle, but the lender pulls out when they realise that the mortgage wasn’t suitable for the investment property being purchased (N.B. this isn’t the banks’ fault; it’s the mortgage brokers’)!

Secondly, a responsive and effective conveyancer. As any estate agent will tell you, slow solicitors kill deals. Time and time again, buyers and sellers appoint conveyancers because they’re the family’s solicitor for their wills or other affairs, but any landlord needs to be business-minded and pick their solicitors based on their responsiveness and aptitude at executing property deals.

COVID-19 has really highlighted this; the best conveyancers have been those who have used modern technology over the years to create efficiencies, which has enabled them to seamlessly transition to working from home, whilst many paper-based conveyancers have struggled. Fees are of second order priority here, especially when you can find excellent conveyancers who might charge a higher fee but do so on a success-only basis, which makes a lot of sense to us (especially given that a third of property transactions fall over).

Cash will (still) be king

Mortgage lenders are likely to be quite conservative post COVID-19, so adjust your expectations to a 60% LTV if you require debt. Many lenders have retreated to this level in recent days and we think it’s prudent to assume that this will be a new market level until a recovery has become more widely established, by which point you’d have probably missed out on the best deals.

Cash buyers will be in the driving seat, as there’s expected to be a big backlog of bank surveying work once isolation measures are reduced, which will slow down mortgaged buyers and make them less attractive to sellers.

If you’re planning on using debt, then pick up the phone to your mortgage broker to know what’s available to you (what was available 3 weeks ago probably isn’t anymore!) and to update them on what type of property investment and bank support you’re looking for.

They’re unlikely to be very busy right now so it’s a good time to get some free advice!

De-risk your investment

Nobody knows what the next crisis might be, maybe a second outbreak of COVID-19 once social distancing measures are eased, so a good way to de-risk any purchase is to avoid being stuck with a vacant property and to buy a tenanted one instead.

Not only does this reduce void risks, but you’ll know what the actual achievable rental level is, you’ll be able to enquire as to the rental history track-record and whether there have been any rental arrears, and you’ll be able to see how the tenant has looked after the property.

Keep your finger on the pulse

You don’t want to miss the best opportunities, so you need to be prepared and positioned to move quickly once the market starts to turn.

A good example of this was in January: Rightmove recorded a 7.2% increase in traffic (an all-time high of 152 million visits), Nationwide Building Society reported a 1.9% increase in house prices (the fastest annual rate in 14-months), and here at we received over £85m of offers (our highest month on record).

Landlords that were already looking at properties and actively engaging with vendors and their estate agents were best positioned to snap up the best opportunities.

Many estate agents (including ourselves) are using video walk-throughs to allow buyers to continue viewing properties and to make enquiries and offers, so there’s no excuse to stop looking.

Whilst the markets will no doubt go through a downturn in the short-term, post COVID-19 we believe that the fundamentals will continue to be strong and the outlook for investing in rental property will be even more attractive:

Tenancy demand

Demand for renting will still be high, possibly higher than ever if you assume that household savings will have been eroded by an economic down-turn and as people focus on repairing their finances.

Currently around 21% of households are privately rented. Prior to the outbreak of COVID-19 this was expected to reach 25% by 2025. We expect that this level could now be reached sooner than that.


Rents have historically been more resilient than house prices (they’re less volatile given that they’re typically contractual for periods of 12 months or more and are slower to adjust).

Although no two crises are the same, it’s interesting to note that whilst property values fell sharply in 2008, rental levels were generally maintained, yields began looking rather more attractive, and then came the swift bounce back on capital values.

We expect something similar could happen during and post COVID-19, resulting in initial yields expanding in the short- to medium-term.

House price growth

Negative in the short-term, but following COVID-19 the effect of continued loose monetary policy and ultra-low interest rates is likely to result in asset price inflation in the medium- to long-term, similar to how it did between 2009-2017 in the years following the credit crunch.

We’d expect to see more motivated sellers during and in the immediate aftermath post COVID-19, which could result in some excellent buying opportunities for investors who are ready to move quickly.

Institutional demand

In the continued hunt for yield, we expect more institutional investment from funds and family offices post COVID-19, both from domestic and international players (the latter taking advantage of the favourable exchange rates).

Good quality, regional (i.e. possibly excluding London) portfolios and apartment blocks will continue to be in the highest demand, especially those assets with several years of rental track-record and which have been well managed to market-level rental yields.

Vesta ( is the data-driven marketplace for buying and selling residential investment property.

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