Luxury Co-Living: The Best Property Investment Strategy in 2021?

Luxury Co-Living: The Best Property Investment Strategy in 2021?
NEWS FEATURES FIRE & SECURITY SUBMISSIONS RESOURCES

Current Economic Situation

Statistically, the UK was due a recession in 2019 during the final stages of Brexit, however just as the deal was finally drawing to a close – Covid was born. This merging of the two crises prolonged the start of the recession meaning that the beginning of this year has only just seen the start of the downturn. The Government has current injected over £280bn into the economy to try and temper the slump, with £73bn of this going to pay the wages of people who are currently unable to work as their sector is temporarily closed. In addition there has been a number of Government incentives relating to the property industry, including the relaxing of planning permission laws allowing many developments to go ahead without the need for authorisation; and a temporary Stamp Duty holiday on houses up to £500,000, saving home buyers up to £15,000. A pent up demand from numerous lockdowns saw a ‘mini-boom’ in the market last year, seeing property prices inflate by up to 15% in some areas of England. The start of 2021 has now seen the start of some of these incentives being retracted from the market, and with unemployment rates dramatically on the rise, 65% of all of agreed sales in 2020 have fallen through. The figure is predicted only to increase as unemployment continues throughout this year, causing more people to pull out of buying houses and even to lose their current homes as a result of the pandemic.

How to market has changed

From March 2020 – April 2020, divorce in the UK rose by a staggering 42%, coupled with the many people losing their jobs, resulting in a heightened demand in the rental market. The need for outdoor space has become an essential after so much time indoors, with a reported 49% of the London population having already moved or planning to move further up North and into the Countryside. People have been seeking out properties have either have large gardens or that are close by to open expanses of greenery such as local and national parks. Ensuring that adequate space is available for an office has also become a key feature for home movers. With a record number of people now working from home, many are actively looking for properties that have extra room to incorporate their desk and computer.

Opportunities

House Prices in the UK are now starting to decrease with a predicted minimum drop of 6.5% by March 2021. This presents a great opportunity to enter the market place and pick properties up for below market value. The downturn in price added on top of the many cases of unemployment and people who have had multiple deals fall through on their home already, is creating an ideal environment for investment in the UK. From a strategy perspective -due to everything cited above, Houses Of Multiple Occupation (where many unrelated people live in one household and share communal spaces such a kitchens and living spaces) are becoming increasingly popular throughout the UK. These properties provide private bedrooms with en-suites and desk space, but have the additional perks of all the bills being included. This means that each tenant pays a set monthly fee for living at the property, but in turn, the owner of the property pays the gas, water, electricity and Wi-Fi. This style of home is proving in high demand as it makes monthly rental payments affordable whilst still providing a sense of luxury living, with many these properties being renovated to a very high standard and are bought strategically in areas close to parks and local amenities. The nature of a House of Multiple Occupation has a ‘ready to move in’ feel, with all fixtures and fittings provided, even down to soft furnishings and cutlery. This plays to the strengths of the new market, with increased divorce rates, and people loosing their jobs daily, it enables people to move in ‘at the drop of a hat’. It is also combating the loneliness that many people have faced during Covid, providing once again a sense of togetherness and unity for a community. A House of Multiple Occupation is a win-win from both an economical and investment perspective. It provides great accommodation for those who need it, following the new demands of the UK Property Market; whilst at the same time paying up to three times more per month vs. a normal family rental home. With the standard House of Multiple Occupation (HMO) having 6 rooms, each at an average monthly rental income of £500 – that’s a total monthly rental income of £3000 against a standard rental property of around £1000 per month – a very lucrative business.

www.kafproperties.co.uk

 

Luxury Co-Living: The Best Property Investment Strategy in 2021?

NEWS FEATURES FIRE & SECURITY SUBMISSIONS RESOURCES