Bigger cities may offer higher income and more job opportunities, but this comes at a price. While the average monthly rent in the UK was 821 British pounds as of the end of 2020, Londoners paid significantly more. Renters in the UK spent between one fourth and one third of their income on rent but London, South West and South East saw a higher rent to income ratio than the country average.
Landlords in the UK have varying portfolio sizes – from one property operated as a private individual, to more than 100 properties, operated as part of a company. There are many factors that come in play when it comes to portfolio management. In the wake of the coronavirus (COVID-19) in the third quarter of 2020, the landlords that were planning to sell a property from their portfolio in the next year were almost twice as many as those that were planning to buy a property. With vaccinations advancing and the economy in the process of recovery, however, appetite for new property has increased. With the tax changes on buy-to-let in place since April 2017, landlords have been able to deduct less of the mortgage interest against tax, until in April 2020, tax reliefs were no longer possible.
Just as any other sector, the privately rented sector is not immune to impacts of the coronavirus (COVID-19). Tenants who suffer loss of income might struggle to cover their rental costs, while landlords might experience longer void periods or disrupted income from rent, affecting their mortgage payments.