At NLIS's London event this autumn, Andrew Neil had a chat with Tracey Hanbury, the Managing Director of the National Landlord Investment Show, to reflect on the panel debate he hosted at the show's October exhibition in London.
Tracey: "The topic was poignant with what is going on at the moment. We had David Smith our economics editor, he gave some sound advice. We had NRLA there (National Residential Landlords Association), we had Paul Shamplina from Landlord Action - we had a real mix. Do you think it covered the subjects well?"
Andrew: "I think we covered the subject. I think it was also interesting that by and large people were pretty optimistic. I think if you and I had been sitting here a year ago - if we'd been allowed to - we wouldn't have thought the sector would be in the shape it is now in. Clearly the pandemic had a huge impact on the sector and it's been difficult; the freezing of evictions, accumulated rent arrears, people, kind of, locked into their existing properties and not moving; there's no question it's been hugely disruptive to the buy-to-let market, that's clear. But, what was not clear to me until today is how the recovery has been so strong, that it's shaken off that pandemic and the buy-to-let market now seems to have a lot of demand for rental properties and, actually a shortage of properties. That is forcing up rents, rents are getting back to pre-pandemic levels again. They're not quite there yet, but they are getting there. Even just looking at the people [in the audience] there, it seemed to me that they look to the future with some confidence now, that they wouldn't have had a year ago, or maybe even 6 months ago. So, it was an encouraging event from that point of view. It's amazing how resilient sectors of the economy can be despite something as disruptive as this pandemic."
Tracey: "I absolutely agree. Obviously, the property sector is absolutely booming. I think for us, in terms of what we do, we've seen a huge number of new people subscribing to our various products that we offer for landlords. I've actually seen a younger generation. Have you noticed that?"
Andrew: "There were a lot of younger faces in the audience today, taking notes, learning! I think they see some opportunities there too. Look, in any business, when demand exceeds supply, that's a good business to be in. That's a time when you can put your prices up, and any inventories of properties you have got a chance of getting it away. I think the other thing that was interesting was that - so often when we talk about the property market it concentrates on London, or London and the home counties and South East - it was quite clear that property demand is strong throughout the country. Indeed, that the pandemic, if anything - I had read about this, but wasn't sure if it was happening, but the panel said it was, the experts said it was - the lockdown has made people think about where they live and about the scale of their property, and whether they need to commute everyday. If they work from home a bit more, could they have a garden? Could they have room for an office? Somewhere where the kids can play as well? Maybe it's time to get out. Of course, the further out you are from a big city, you've always got that dreaded commute. Here in London and the South East, people can commute for an hour and 90 minutes at times! Everyday, you see them on the M4, in trains, and so on. But, if you're not going into the office everyday, as many have moved to a more hybrid kind of working, then why not think about renting a house 20 or 30 miles away from a big city. Because you can then plan: 'I'm going to go in that day' or, 'I may be able to go in that day, but not during the rush hour'.
So, I think there are definitely demographic changes taking place and the buy-to-let market, I think, is reflecting these changes. What is on offer reflects the change in demand.
Tracey: "I totally agree. We just did our Manchester show two weeks ago, which is our first one back, and the number of young people from all over the country that were coming up to look for investment opportunities in Liverpool, Manchester, all of those areas, was amazing to see. So, I totally agree with you."
Andrew: "I think also what's happened is that a lot of older people, let's say the over 55's, I think lockdown has made them rethink their lifestyle. Instead of living in a small-ish apartment in the centre of a city or even just outside the centre, they're thinking 'well, actually, I'm not going to go back to 5 days a week any more. I'm just going to do 2 days a week and maybe another day from home as well. So, why do I need to be in this little place now? I'm going to move out, my lifestyle will change, more time to see the grand kids, more time with the family, more time to pursue hobbies.' That won't change. I think that's a kind of lifestyle change that the pandemic has brought on and that, again, will reflect the changing demand in the buy-to-let market. To do it, people may not actually think of buying a place to begin with, because it's a bit of an experiment. So, rather than buying a place, 'let's rent and see how we get on. We can always buy later if it works'. It's not just a London phenomenon, if you look at what's happening outside Birmingham or Manchester or Leeds - because if you're in Leeds, you only have to go 10 miles to the north and you've got some of the most beautiful countryside in the United Kingdom - in Europe!
So, I think the pandemic, despite it being the most miserable of times, as we come out of it, it's had some upsides."