Eviction Moratoriums Are Almost Over! What will Happen to the UK Property Market?
Clearly landlords and buy to let investors will have lost billions of lost rent. Considering the high costs of housing, the increased price of goods, and the pandemic, most of these renters don’t have much, if anything, in savings. There are a lot of renters that will be facing eviction in the coming months. The courts will be clogged and possessions will take a very long time. Thus more losses for buy to let investors with working tenants.
Luckily we are in the social housing space with long term contracts and no voids, no management and virtually no maintenance. We dodged the non paying working tenant bullet.
It’s never a good situation to have millions of renters on the verge of eviction. Yes, consumer confidence, housing demand, prices, and other economic data points suggest the housing market will be okay. Still, an eviction surge is never good for the economy. In the meantime the UK property market is surging. It is a sellers market.
Mass eviction leads to a temporary (or permanent) loss of income for landlords who may have already been strapped for cash with the moratorium. In turn, they may default on their mortgages—and investors who are underwater might take a step back and sell some properties.
If that happens, then we could have a flurry of foreclosures, potentially leading to price depreciation and ending the bullish streak of the market. But of course, depreciation equals a loss in wealth, which harms the economy. As it stands now, it is still a sellers market & an investor should be able to unload the property on the market rather than let it default.
However with this said, who would have ever expected Covid? Who would have thought during Covid prices would be stable and even go up? Bascially as UK property investors….I believe we should be ready for any unthinkable scenarios. Buy right…have good cash flow…low leverage.