There has been a sharp rise in demand for rental homes as more people start planning for life after the existing lockdown, new figures show.
Demand for rental property increased by 30% in the two weeks to 14th April, although it is worth noting that this hike comes off a low base following the impact of coronavirus, which saw a 57% fall in demand for rental housing in the two weeks to 30th March, according to the latest Zoopla Rental Index.
The Covid-19 pandemic has had a devastating impact on the rental market, with demand from renters still 42% lower than at the start of March.
However, the impact of coronavirus has been less pronounced in the letting market compared to the sales market.
The rental market is more dynamic than the sales market and increased uncertainty means households looking for a home will turn to the rental market first to meet any immediate housing need.
But while activity levels are likely to rise more quickly in the rental market than the sales market once the coronavirus lockdown eases, there is still likely to be a noticeable annual drop in rental market activity.
There are typically around 1.2million moves a year in the rental market, but Zoopla predicts that this could fall 25% over 2020, compared to 2019.
According to the Zoopla rental index, the annual rate of UK rental growth flattened in March - reflective of seasonal trends rather than ramifications of the coronavirus lockdown.
Rents were up 2.4% on the year, compared to 2.5% annual growth in February and the 2.3% recorded in December 2019.
Despite the slight slowdown in growth, rental growth has been on a largely upward trajectory since March 2017 amid increased demand and shrinking supply.
“The flexibility of the rental market is one of the key factors which has allowed activity to bounce back more quickly than other parts of the property market,” said Gráinne Gilmore, head of research, Zoopla. “The rise in demand in the first two weeks in April indicates that some tenants are already mapping out their next move.
“As with the whole housing market however, activity levels and rental growth will likely be closely aligned to the economic landscape of the UK once the lockdown eases and the immediate impact of Covid-19 starts to recede.
“Rental growth has increased steadily for the last 3 years as demand has increased in the face of dwindling new supply. However, If the responses to COVID-19 contribute to a rise in unemployment, as some official bodies have forecast, this will reduce the scope for any additional growth in rents. We expect growth to moderate this year, but to remain in positive territory.”
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A very optimistic article based on historic data. It sure feels to me that we are in a new world. Last night spot oil had a negative value, that a first!
There have a been a lot of journalists desperate to fill their columns with the world has changed forever articles, personally I don't see it, people are creatures of habit and will very quickly fall back into their familiar work patterns, true there may be an increase in home based workers but the effect will be minimal to the overall market, I suspect that we will be working flat out all the way to Christmas as the world catches up with its lost 3 months...
It maybe likely that mortgage payers will get into arrears if they lose their income, forcing the repossession. These families then will be looking towards rentals for their housing needs. The sad part is that due to the Govts policy of hitting the private rental sector causing many to leave the market, there will be even less rental properties for them. It really is time for Govt, Shelter and Co. to really step up and work with landlords to bring forth more rentals for those in need and stop this ineffective 'landlord bashing' the only losers are those looking for homes.
There is no chance Shelter will engage, they are only interested in socialising the entire housing market, nothing less will do for them. The great shame is that the RICS and other trade groups have failed dismally to lobby the government entirely through their own poor leadership.
I dont think there will be any long lasting damage to the market when we look back in 18-24 months time, however activity will be slow to return, its not just about money and jobs. One point that most commentators overlook when talking about the lockdown ending is the fact that there are millions of people who are petrified of getting CV19 and will continue their own self imposed lockdown to one degree or another, and its not just the elderly. Vulnerable people will include asthma sufferers and diabetics for example, people with what are normally very manageable conditions. Demand may exist straight away online or in peoples desire to move but I think it will be a few months at least before we start to see anything like normality return.
Then there is social distancing and the practicalities of it slowing everything down and reducing capacity, affecting most industries, that most "experts" are saying will need to stay in place for 12 months. Less people on buses, in planes, less appointments of any kind being able to be done each day, whether a lettings agent or any other client facing professional. Where it was X no of move ins on a saturday, it will now be less. Anyone thought about going on holiday later this year? Yes it could be a calculated safe risk to do so, planes in the air, hotels open, but imagine social distancing in a resort, at the bar, in the pool, in restaurants. The lockdown may be over for us all and the holiday industry later this summer, but not many people will be going on holiday, just simply because it would be a crap experience for no doubt the same price.
I think Mathew and Daryl are correct, and the article is absolutely way off the mark.
Other countries are expecting a tsunami of evictions for rent arrears, Post Covid when the Govt high-jacking of the Civil Justice process ends. and the UK isn't going to be any different.
Sure its going to be a backlog and take time ( longer ) but so many people will have bad credit and be looking for accommodation, the PRS isn't going to take many of them.
L.A.'s are going to be absolutely inundated with Emergency accommodation requests.
Mark my words, Landlords in many countries are going to have the last word on this, not Governments
Some rubbish who cares what happens we were destroyed already before Corona, now talking about rent increases when my rents are down 30%
Don’t worry we will be very busy taking on new tenants in a couple of months. All good credit, professionals that handled themselves well in these times.
Simple first question. ‘Did you leave your last landlord in arrears during CoronaVirus?’
No - move to next level
Yes - we will get back to you
No discrimination of course
I'm sure there is some kind of good reason, but I don't get why as part of the referencing process the inventory check out report is not included in the process, if you want to know what your tenants are really like... It would have to be provided by a genuinely independent clerk though, AIIC or APIP approved, none of that in house nonsense...
It seems to me that the more properties available to rent means that those seeking rental properties will be able to pick and choose thus driving the rental fee down, thus the ball is in the tenants court. If there are fewer rental properties then the ball firmly falls in the landlords favour and rents will rise. So why does Shelter and Co. insist on landlord bashing preventing, as far as they can, from landlords increasing their portfolio? Surely, if they really want to be on the side of 'housing for all' they should be on the landlords side and encourage more rental properties. Anything else goes against their ethos of 'Housing for all'
That is a well considered common sense expertly put viewpoint. Unfortunately these organisations have another agenda. Making money for themselves by using the tenants ranting as ammunition. One day the genuine tenant will realise how they have been betrayed by this organisation.
Many LL rather than leave the PRS entirely will reduce their leveraged exposure such that any rent default won't bankrupt them.
It is the leveraged LL that is facing bankruptcy.
Such LL will surely wish to become far more resilient
You can be sure there will be further CV19 outbreaks..
There were outbreaks of the Plague for 300 years
CV19 is the new Plague.
Already the European CV19 has mutated from the Chinese original version.
Like it or not the world will have to face a new societal paradigm.
LL need to pick tenants who will pay rent in difficult times.
Taking on tenants who work in flakey non-essential industries is just asking for trouble.
Inevitably LL will de-risk as it makes business sense.
There is no returning to the old ways.
There will be far fewer rental properties as a result of LL taking steps to become more financially resilient.
Few LL will wish to take on flakey tenants.
Perhaps the unencumbered LL will take such tenants on.
A mortgaged LL simply can't afford the risk.
Apart from anything else the stress just ISN'T worth it.
I have properties fortunately mostly fully Iet but I am very concerned that this situation could change to my great detriment.
The old certainties of rent usually being paid are long gone.
This CV19 has exposed the vast underbelly of feckless tenants who with Govt assistance can now easily default on rent knowing it will take years to get rid of them.
In practice rent defaulting tenants will be removed by repossessing lenders long before a LL is able to conclude an eviction process.
There will consequently be many LL bankruptcies.
LL will need to rapidly change their business models if they hope to survive in any form.
It would be great if the leveraged PRS reduced from the current 50% to about 25%..
Then we would have the very gratifying sight of mass homelessness.
.
Only then might Govt realise it's enormous mistakes in the way it has treated the PRS.
But it will be too late.
The UK Govt will take years to restore the PRS as few LL will return despite Govt attempts to persuade them.
This is what has happened in Ireland as they now have a massive homeless problem.
I sincerely hope that when I leave the AST PRS that I make my many occupants homeless.
It won't be my fault as I don't want to leave but bonkers Govt policies are forcing me to change my business model.
Many LL will be making the same determination as me!
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