After two-months of ‘frozen’, activity, the UK rental market has witnessed a considerable resurgence in market activity, due to excellent tenant demand. 

Although the market has witnessed that period of stagnation, due to the social distancing measures announced by the government in March, the ‘opening’ of the property market in May has seen demand for rental properties skyrocket. Such an increase in demand for rental properties has led some industry experts to note, that the sector is in fact, almost back to its pre-coronavirus levels.  

Before we explore the reasons why this sector has seen such a resurgence, and what this means for landlords. It is crucial to understand how the lettings market has been affected. 

How was the lettings market affected? 

In comparison to the sales sector, the impact of the coronavirus has been far less pronounced. While there naturally was a significant decline in demand for rental-property during the early stages of the lockdown (Zoopla reported a 57% decline in demand in the second half of March). The flexible nature of the rental market limited a severe fall, as shown through the 30% rebound in the first two weeks of April.

Although the lettings market in nature was able to diversify and witness increase demand, the number of properties available to rent was down 3%, due to landlords withdrawing properties from the market or tenants taking up vital stock.

How has the market reacted? 

Since the ‘re-opening’ of the market, the demand for rental property has been significant with signs of confidence returning across the board from investors, landlords and most importantly, tenants. As some sense of normality returns to the UK, tenants looking for a new place to live quickly turned to their local letting agents and the giant property portals, for the most suitable property available. The significant increase in demand was accurately demonstrated through the property giants Rightmove and Zoopla, who both have recorder their highest number of users looking for rental properties in their history.

 How the rental market has reacted to the re-opening of the market changes significantly changes across the country with variations from city to city. As expected, London letting agents witnessed the most significant increase in its rental stock as well as demand for new properties, as young professionals slowly return to the city. In comparison, North East lettings agents received a slightly lower level of demand for properties.

While demand for property has steadily increased with the further easing of lockdown measures, it is widely accepted the recovery across the property will be a gradual process, and all future activity will be defined by social distancing measures.  

What does the future hold?

Both tenants and landlords will be keen to know what the future holds for the country’s rental market. While the past month and a half have provided both tenants and landlords

with some sense of confidence in a return to pre-COVID levels, the exact future of the market is unknown, with lettings agents regularly stating ‘we are not out of the woods yet’. 

One of the most uncertain elements we can be aware of is the future relationship between tenant and landlord. Although landlords across the country will be looking to secure their return from their property increase back to ‘normal’ levels, a large proportion of landlords have chosen not to increase rents in an effort to recognise the financial difficulties facing many tenants as a result of the pandemic. The national scale of the epidemic across the country has had the greatest haltering on rent increases for many years. How long the ‘freezing’ of rents will continue is a questions landlords and high street letting agents will be looking to answer very quickly. 

While the pandemic has created a sense of uncertainty in the market, the continued demand for property has provided with landlords and investors with some sense of confidence in the future of the lettings industry. As landlords come to terms with the current economic situation, it is vital both they and letting agents keep the rent from tenants flowing to sustain their business, but most importantly sustain the wider market.