Rents are still on the rise. Outside of London, the average monthly rent hit a record high of £1,316 recently, according to Rightmove. In the capital, the average advertised rent is £2,652, a 4% increase on last year. To find more options, renters are looking in new areas and for different set ups.
The expense of London, and other property hotspots such as parts of Devon and Cornwall, is also proving too much for some landlords. Exacerbating the challenge further, some landlords are selling up in London and beyond.
This raises the question, where are participants looking for refuge? As to be expected, many in the south are heading northwards for cheaper prices, with the East and West midlands proving particularly popular.
Some investors may already be ahead of this. Paragon Bank revealed that Manchester’s M14 postcode was the popular location for landlords to invest in last year. Birmingham, Durham, and Nottingham also proved tempting.
Exploring more unique target markets could also prove to be worthwhile. The ongoing housing crisis has led to some truly interesting living arrangements.
House shares remain a top choice. Houses in multiple occupation (HMOs) have been rising in popularity with landlords, with healthy yields still available. But, new, unique tenants can be found in the current market.
Young professionals and students are still likely to be key utilisers, but intergenerational house shares are also on the rise. This kind of homesharing set up can provide younger tenants with financial breathing space, while also giving older generations practical support and company.
Also, with 2.5 million single-mother families in the UK, more than triple than what was seen in the 1970s, “mommunes” have apparently been sprouting up in the UK. Here, single mothers facing down the challenges of rising costs live together to share the load, and raise their children.
What borrowers invest in, or how they should best react to a shifting market, will depend on their circumstances. But, evidently, all this goes to show that when costs simply get to high, people adapt – often by necessity. We evolve in the property market and despite appearances, we are never short of options.
New, unique outcomes can pose difficulties however, especially among mainstream lenders. Anything outside of the ordinary is likely to raise red flags on a nervous high street. Fortunately, the specialist market continues to embrace flexibility in this constantly shifting industry. No matter how unique an investment strategy, we will always give it a fair hearing.