It’s one of the more left-field pieces of news to hit our inbox recently but given that 2020 has been very much the year of the unexpected, file this one under ‘probably not that shocking’.
It’s not exactly been the year of the retailer, with the government shutting down the vast majority of the retail industry for nearly 3 months earlier in the year, and much of the UK being under some form of restriction for most of the year.
Retailers had already been having something of a dry patch recently anyway with the rise of Amazon and online shopping in general, so you can add a global pandemic into the category of ‘unwanted development’.
One of the institutions and market leaders for ethical retail, John Lewis, have been particularly badly affected by the pandemic, recently announcing that staff will not receive a bonus for the first time since 1953 after it was struck by store closures in March and April. John Lewis – which also owns Waitrose – posted a damaging £635m pre-tax loss for the six months to 25 July after higher costs offset a 1% rise in sales.
With that in mind the bosses at the retail giant have had to start thinking outside of the box to come up with ways to diversify their income streams to shore up the chain’s long-term prospects. That seems to have come as they recognised one of the strongest, most unaffected areas of the economy.
Residential Property
According to the Guardian, John Lewis are now planning to build residential properties and become a landlord. The plans involve building houses besides or above Waitrose supermarkets all across the country, initially starting with 20 locations.
According to the article, ‘The chairman, Sharon White, an economist who joined the business in February this year, said John Lewis would back new business ideas – such as the homebuilding project and other plans such as selling home insurance and potentially opening garden centres – with £400m of investment.
‘We’re a landlord already at three of our properties, so this is an obvious extension for us. And we’re now talking to developers and investors who can help us achieve our ambitions,’ the company said.’
A strong vote of confidence
As those already in the Buy-To-Let or Private Rental Sector (PRS) game will know well, 2020 has represented a particularly strong year for landlords despite the huge challenges that it has brought.
Prices, yields and demand have all been soaring despite choppy waters and this has led to a large influx of money and investment into the sector.
With the pandemic highlighting property as a priority for people again there has been a renewed focus and urgency in the market creating huge demand for what is, ultimately, quite a limited supply. As any agent or property website will report at the moment there just isn’t quite enough to satisfy demand right now.
That together with the fact that interest rates are historically low and tax breaks are at the most inviting for a decade, it must be said that now really is the time to consider investing further.
Are you interested in investing in the buy-to-let market? Why not take a look through our wide range of income generating properties here!
