What will the lettings market look like after lockdown ends?

An exercise by PropTech company Goodlord has given an insight into what the lettings market may look like in parts of England after December 2.

Lockdown finishes on that date and from that moment, different local areas will be classified under the former Tier 1, Tier 2 and Tier 3 levels - the latter being the toughest.

Prior to the latest lockdown, the city of Leicester had been under tough Tier 3 restrictions for some months, and Goodlord has analysed what this has meant for its lettings sector.

Despite house moves able to go ahead throughout, the analysis from Goodlord shows the lettings market in the area spiking in activity immediately before restrictions were introduced, followed by a significant slowdown when year on year figures were compared. 

The Leicester lettings market suffered a 22 per cent reduction in tenancy completions when compared with the same period last year. This drop followed a rise in activity of 44 per cent during the two weeks before the region entered Tier 3.

A sample size of 1,000 tenancies from 27 lettings agencies were assessed as part of this research, and Goodlord believes this data provides a strong indication that the weeks ahead will be difficult for the property market. 

Following an early surge in activity immediately following the announcement, the rate of new tenancies is already slowing despite renters having permission to move house between now and December 2. 

The data from across England showed an eight per cent uptick in lettings activity over the fortnight leading up to the national lockdown - which came into effect on November 5 - as renters rushed to move. That surge is now dissipating, with the market slower compared to the same time last year. 

The PropTech firm believes that the numbers indicate that most regions will see a decline in activity over the coming weeks. Although the slowdown is in no way anticipated to be as sharp as the Spring lockdown - where market activity had fallen by 72 per cent by mid-April - a reduction in new tenancy applications is predicted in addition to the normal cooling of the market that is typically seen during winter.  

Tom Mundy, chief operating officer of Goodlord, says: “Despite house moves having been permitted across England since May, this analysis shows just how impactful local lockdowns can be on the lettings market. Leicester, which has been under additional restrictions for many months, has seen activity drop by a fifth compared to 2019.”