Spare Room Boom: Finding Competitive Larger Properties
Despite the lockdown, certain parts of the housing market flourish. There was a potential fall in demand for all kinds of housing, but in fact, today’s situation is beneficial for many landlords. Those who invested in a larger property, experience an unexpected boom of demand. This situation is great for the market, but it might be as well less fortunate for some owners.
Today, property investors and landlords’ returns are slowly rising. As the lockdown eased, the rent prices started increasing, especially in the South West, which experienced a rise of about 3%. Moreover, in the North West area, the number is slightly bigger and equals 4%. Yorkshire and Humber have been growing property prices over time, and nowadays, the rent gets higher. In fact, Yorkshire tops the country’s table for house price growth. Of course, the situation is beneficial, because returns have finally started to rise again. In the time of the lockdown, the property market stagnated, and today is the time when the prices will stay up, and the returns will also continue to rise.
Still, this situation comes with a price. The seemingly beneficial matter of things might have its hidden strings that, again, lie in the changes in the market after the lockdown. This time bears much uncertainty which lies in the unpredictable market. First of all, many weren’t ready for the lockdown, when many people lost jobs and left more expensive apartments or relocated. When there started a tendency to rent houses far from the city centre, no one was particularly ready. Now, the situation takes another turn. As there are now many more people who work from home, lots of property gets rebalanced.
What happened? When more people began working from home, they started to, literally, spend more time at home. While earlier, living in a smaller apartment did not cause any discomfort, in the times of the lockdown, many strived for more personal space. Single people, couples, and working members of families all felt the need to have a specific room for work without distractions. Moreover, working and living in the same space is undesirable for many. This situation violates the work-life balance, so many people search for an apartment with a spare room. As for the couples, the need for more personal space also drives them to rent more spacious flats and houses.
Because of the changes described above, new renting requests drive the market up. There is a need for properties with an extra room. So, larger homes are now on the rise. However, as the tendency to find more spacious properties stays, there might be a potential glut of smaller-sized ones. This glut is, of course, undesirable for the owners. The empty properties will have hard time finding tenants, except they are extremely competitive. Still, most of the smaller homes will experience a fall in demand.
Thus, having a property in certain areas or ones of a certain size benefit investors and landlords. For example, properties in South West, North West, Yorkshire, and Humber have increasing rents because of high-demand locations. Moreover, large properties are on the rise today because of the growing number of people who work from home. They need more personal space or extra space for work, which is good for the whole housing market. However, for certain segments, for example, smaller-sized properties, the situation might not brighten up. There is likely to be a massive price correction of such housing in the nearest future due to excessive supply. Still, there is a certain probability of a low growth that will extend into 2021.