In many senses, the aftermath of a global pandemic and recession doesn’t strike you as the ideal time to be investing into assets or property, however, these far from normal times and the usual rules of engagement are completely out of the window.
There’s also the truth that, as Warren Buffet articulated, “When the market goes up and up, everyone looks like an investing genius. It’s only when things go sour that you see who actually has a good long-term strategy.”
Opportunities for increased gains tend to present themselves when there is turbulence in the market, and this seems to be the case in the current circumstances when looking towards landlords, property investors and their portfolios.
As things begin to revert to some normality, it’s important to remember that one of the central success stories of the economy and a major reason as to why it both wasn’t as badly affected and will likely rebound so strongly, is the property market – and the incentives that the government have provided for it.
It’s expected that those incentives will continue further into the year than expected and it looks to have been one of the reasons why landlords are extending their portfolios at the moment.
Stamp Duty Holiday
One of the most popular schemes introduced by the chancellor Rishi Sunak last year was the removal of stamp duty for the majority of the year.
In essence it meant that many were saving thousands on the sale price of their properties and resulted in an explosion of sales.
According to new research by Direct Line insurance, 60% of multi-property landlords have expanded their property portfolio since the introduction of the policy back in July 2020.
Commercial landlords have also taken advantage, with 80% saying they too have expanded their portfolios thanks to the stimulus.
Jamie Chaplin, landlord business manager at Direct Line, said: “It’s been encouraging to see the property market so buoyant since the Stamp Duty Holiday was introduced. And it’s been interesting to see more landlords invest in rural properties”.
2021 and beyond
The news has been received as a really positive sign that the bumper year that UK property experienced in 2020 will continue through this year and beyond.
The pandemic appears to have stimulated the market more than many anticipated, with investors and homebuyers alike now seeking to move property, some sooner than they’d planned.
It has also resulted in older renters, by and large, moving out of cities ahead of schedule whilst younger renters are moving into cities earlier than they’d planned after getting caught at home with parents and family.
This has provided a sharp increase in demand whilst supply has struggled to keep pace, meaning that upward pressure on prices and rents has been stark.
This has, of course, been great news for landlords and investors who will be hoping for another great year in 2021 as the market continues to go from strength to strength.