Rental Sector Thrives During Lockdown due to Job Losses, Break-Ups
While Britain’s housing market sales have experienced a slowdown during lockdown, the private rentals sector has been buzzing with activity. In fact, the latest report from Rightmove suggests that demand for lettings across the UK is currently 22% higher than it was at the same time in 2019.
As lockdown restrictions are gradually eased, the pent-up tension and aggression of frustrated movers is making its mark on the sector. Such is the demand for rental properties that experts believe inventory will be reduced quickly, possibly leading to a surge in the average monthly rent prices in key areas.
Interest in all types of rental properties initially plummeted when lockdown was first enforced, though has skyrocketed since. Experts have cited job losses, relationship breakdowns and the simple desire to change their surroundings as key reasons for renters in record numbers looking to relocate.
An Influx of Interest
In stark contrast to the huge fall in visitor numbers seen towards the beginning of lockdown, Rightmove reported the busiest ever day in the history of its website on Wednesday, May 27, 2020. Six million people visited the online property portal, of which a sizeable proportion were on the lookout for rental properties and hoping to move as quickly as possible.
“They may need to move for a job,” said Rightmove.
“In this environment, there is a need for people with specialist jobs to be in a certain place. Just think about the Nightingale hospitals that have sprung up,”
“Where some people have enjoyed lockdown, others have had relationship breakdowns and this has had knock-on consequences,”
“There could be people who need to move because of job losses too,”
“And working from home has left a lot of people looking for a change in surroundings,”
“Effectively we have two months of pent-up demand that needs to be satisfied.”
Supply Unable to Meet Demand
Demand for rental properties is well on its way to matching pre-Covid-19 peaks, though experts warn that supply will most likely be unable to keep up. While significantly more renters are searching for new homes than during the same period last year, new rental listings are down by approximately 4%.
The coronavirus crisis prompted many landlords to sell off parts of their portfolio or exit the market entirely, due to ongoing uncertainty regarding the buoyancy of the market and the economy in general. A recent study found that at least 12% of renters were already struggling to pay their bills due to the Covid-19 outbreak and many landlords have seen their income plummet as a result.
Would-be movers have already noted how landlords are becoming increasingly strict in terms of eligibility requirements and preferred tenants for their properties.
“They [landlords] are going to pick those with the best references and who can move in immediately. Those whose credit record is not the best tend to lose out,” commented Rightmove.