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Exclusive: Rental market may quickly bounce back, new analysis shows

A new analysis reveals three key figures that suggest the rental market will bounce back from the lockdown and the Coronavirus crisis rapidly - and faster than the sales market.

In an article exclusively for Letting Agent Today, the head of research at Zoopla - Gráinne Gilmore - explains that while activity in the rental sector has been significantly hit by the virus, the damage done is arguably less severe than some observers suggest. 

Here is Gilmore’s piece in full:


The three key facts in the rental market

Interest in the housing market is nothing new, as any agent who has been cornered at a party (remember those?) to be quizzed about a fellow reveller’s house value or rent rise will know. But the demand for real-time data to inform thinking on the market has never been greater. As shown in the latest edition of Zoopla’s Rental Market Report: while the rental sector has been affected by COVID-19, it hasn’t been affected to quite the same extent as the sales market.

There are three key figures which help explain the latest trends in the lettings market:


Demand from tenants fell by 57% after March 7th, when the impact of Coronavirus began to be felt. This compared to a 70% decline in the sales market, and illustrates how the flexibility of the rental market has helped its resilience, especially after the lockdown. Demand stopped falling at the end of the month, and has risen by 30% since then. 

However, when we compare these levels of demand to those seen last year and in 2018, the metrics are a more modest 20% lower, highlighting the seasonality of the rental market, with this being one of the relatively quieter times for activity. 

What we also wanted to examine was the nature of this demand, and the price brackets in which it was focused. Across the UK, the price brackets where demand is clustered remains largely unchanged compared to the pre-COVID-19 period.

In London, what we saw was a slight shift downwards in the clustering of demand from properties to rent priced at £1,400 - £1,500 a month (where the largest purple line is below, showing the highest levels of demand in late February) to those priced at £1,200 - £1,300 (largest orange line below, showing the highest levels of demand in early April), which could be a signal of the current financial conditions. We will keep monitoring this trend.


We expect that once the lockdown eases, activity will pick up relatively quickly, given that the new index shows that the average time between listing a property and letting it out was 17.7 days (reflecting the more normal market conditions of early March), compared to the sales process which can take 2-3 months.

If the lockdown eases in time for the seasonally more busy times in the summer and early Autumn, rental activity levels could match those seen last year. However, this would still mean that there have been 25% fewer moves in the sector compared to historical norms, given the very quiet April and May.

Rental deals are still happening, with agents, landlords and tenants organising remote viewings and flexible moving in dates.


In terms of rents, the Zoopla’s rental index shows that average rents across the UK remained broadly unchanged in March, down marginally to 2.4% from 2.5% in February, but up from 2.3% in December. These index figures are unlikely to reflect the full  impact of COVID-19 however - this will become evident in Q2 figures.

The flexibility of the rented sector will mean it bounces back more quickly once the lockdown restrictions ease. Stay updated on all the latest data on the lettings and sales market at https://advantage.zpg.co.uk/


  • dale james

    Am I the only one who is tired of statistics these days. It is obvious to me that the lettings market will achieve previous levels quicker than sales as sales has a longer lag time to filter through. Although, while there will be tenant demand I am seeing signs that its the final straw for some landlords and agents after Tenant fee ban and Section 24 tax etc.


    Is this another organisation stating, to quote Monty Python, the bleedin obvious. You and I agree DJ.

  • Bryan Shields

    It is obvious, that owners want full control of their investments, A.S.A.P.
    If not they will require empty properties for selling. A.S.A.P & move onto better pastures.

  • icon
    • 29 April 2020 08:44 AM

    Many LL will have been frightened to death at how quickly their investments became unviable.
    Leveraged LL operate a very risky business model.
    I doubt many LL ever appreciated that all of a sudden rent wouldn't be paid effectively sanctioned by Govt.
    I predict many LL will be reducing that risk.
    Mostly by selling properties and paying down remaining mortgages to become unencumbered or as unencumbered as they can.

    I predict there will be a large increase in the unmortgaged PRS and a substantial reduction in the leveraged PRS.
    This will leave many LL in a far more resilient position as there will be another pandemic as long as people travel in aircraft with no real checks on those people.
    Aircraft are fantastic virus propagation tools
    The viruses just love being able to get round the world so quickly courtesy of the airlines.
    This CV19 will be far more effective in getting rid of leveraged LL than S24.

    The days of risking being a leveraged LL are coming to an end.
    The risk of bankruptcy is simply too high in light of how a pandemic can affect things.
    The numbers of LL will remain roughly the same but they will have far fewer properties which will be mostly unencumbered.


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