Mon 18 May 2020
The effects on the property market of Covid-19 are clear; with the general populous on lockdown there are bound to be fewer movements. However, new research from the Zoopla Rental Index has indicated that people are already making rental plans for once the lockdown period is over, a positive sign for the lettings market.
In the two weeks to 14th April, demand for rental property increased by almost a third, albeit this is following the downturn due to the coronavirus in March which saw a 57% fall in demand. Since 14th April the rental demand from prospective tenants has continued to gradually creep up. Between the Easter Bank Holiday and the VE Day Bank Holiday, new applications rose by a staggering 45%; with completed tenancies increasing by 22%. Year on year, rents are up 2.4% which is largely in line with annual growth seen towards the end of 2019 and in February of this year. Essentially, we are seeing demand for rental properties growing much more quickly than for sales properties, and rents are holding steady in unfavourable conditions.
“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 shows that 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.”