What is Going to Happen to the Lettings Market Post Lockdown?
Landlords are all currently questioning whether COVID 19 is going to cause a drop in the rental and sales market. Here is a little insight and some positivity to guide you through what is happening right now and certain predictions agents have made once we have survived this current pandemic.
The lettings market then and now
The lettings market, like all other markets in the UK at this present time, has experienced a strain. As an industry which is usually so focused on people being able to meet each other face to face to visit commercial and residential units, we now can’t meet each other, and any access is very limited. This has inevitably had an impact.
At the end of 2019 and the beginning of 2020, the lettings market saw the demand was dramatically outweighing the supply due to new tenant favored government legislation becoming too much for some landlords. There were also less ‘buy to let’ landlords on the market due to the Brexit effect.
Tenants were more than ever before likely to renew their current tenancies due to not seeing enough option on the market for them to make a motivated decision to move. The lack of stock meant high rent levels were being achieved as tenants made offers over the marketing price to secure the property quickly, marketing prices increased due to the high demand and void periods became almost nonexistent.
It has been apparent that since COVID 19 has entered the UK and become a global pandemic, there has been an influx of new properties on the market across the Capital. Short let & serviced apartment companies no longer seeing a return in the short let market, have been terminating current agreements with immediate effect, bringing these options back for the long let tenants without homes. Read more on this here. As well as this, many tenants have been handing in their notices to leave the Country and the Capital City of London in order to return to their families.
Can I still let my flat during lockdown?
Agents who were able to be prepared before working remotely, managed to obtain Virtual viewings for most of their available properties. This has been a successful tool in helping to keep the lettings industry moving, with properties still being exposed correctly, interest still being aroused and offers still being made by those who need to secure something urgently. See our blog on Virtual Viewings here.
The government announced on 27th March 2020 that there are to be no move ins unless absolutely necessary. Since the government announced no move ins during lockdown, this has naturally influenced less renters to enquire on available properties and renters already looking through our agency are putting their searches on hold until the lockdown period is over.
This does not mean that you can’t find new tenants for your property. There are still a few who are receiving videos and wanting to secure move dates for once lockdown has lifted and discussions about future searches are still being had. Flexibility is key. If a new tenant wants to start a tenancy with you, be flexible with the tenancy start date so that all government rules are being adhered to.
What is predicted to happen after lockdown?
Looking at daily performance analysis reports of available properties, we can see that there are more and more renters clicking through online property advertisements now, than in the past four months.
This is somewhat like the New Year trend which we often see every January when people have had a break at home over the holidays; we feel there is going to be a lot of motivation for renters to move. These include: Couples wanting to move in together after finding it hard being apart, moving closer to their family, relationship breakdowns, finding faults with their current property, needing to up-size (with new babies), feeling the need for outside space, needing to downsize due to financial constraints, boredom after looking at the same four walls for a long period of time. As well as all renters who were searching previously resuming their searches.
Although some rental property prices may naturally have to come down now that the demand is no longer outweighing the supply and to mirror the current economic downfall, we feel that the market post lockdown is going to be the busiest we have seen for a while.
GLP are anticipating a surge of activity upon return, so currently trying to ensure everything is in place correctly, all landlords are advised, and properties are prepared for new tenancies in anticipation for an extremely busy few months in Q2 and Q3 of this year.
Blog by Megan Cutforth, Lettings Manager – Bloomsbury Office
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