The Future of the Rental Market Post-Pandemic
With the country now in 2024, a lot has happened to the UK rental market since the dawn of the Covid-19 pandemic back in early 2020.
And with the emergence of Omicron across the globe, a new wave of uncertainty has rippled through the country, with potential investors and landlords asking, “how has Covid-19 affected the rental market?” The future continues to look unclear, and lockdown has changed the way people lead their lives.
After being cooped up in their properties and working from home since March 2020, people’s habits and opinions on what they want out of their homes have shifted, which has had a dramatic impact on the UK rental market.
Not only this but during the rental market in Covid-19, UK rental prices have also changed, making it hard to know exactly how to act in the current climate.
So, if you want to understand “how has Covid-19 affected the rental market?” and to find out more about the rental market post-Covid-19, this is the blog for you.
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The Rental Market Covid Impact
Financially, despite some changes, the UK rental market has generally remained strong and stable.
In July 2020, a Savills report found that there was a 60% increase in new applicants registering in prime rental markets than in the 12 weeks prior to lockdown.
People are clearly still hungry for new properties, with the Guardian reporting the number of homes let between May and September was up by 1.3% in the top 10% of neighbourhoods.
Many landlords are still confident within the current economic climate, with Rightmove finding that one in six are considering expansion.
A big reason behind this was the stamp duty holiday that ended in October 2021 and gave investors more bang for their buck, with the potential to save up to £15,000 on taxes.
Of course, the rental market with coronavirus was always going to feel some impact, but this impact has been far less than anticipated.
The National Residential Landlords Association (NRLA) found that 48% of landlords expect a slight negative impact, with private sector rent arrears having the potential to total as much as £437m.
It should be noted though that the NRLA found that nine out of 10 tenants continue to pay rent, highlighting that the impact is far less than first imagined.
Despite the arrears, there is still plenty of room for investors to earn serious money.
Although nationally the total number of homes let between May and September fell by 5.3% compared with 2019, which can be attributed to a reduction in people moving for new jobs and an increase in redundancies, house prices are continuing to rise at their fastest rate since 2016.
The UK market has recovered so well in fact that Savills has updated its five-year house price forecast, predicting a national 17.9% growth by 2028.
The North West, in particular, is set to boom, with a staggering 20.2% increase in house prices by 2028.
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Along with these headline price growths which show how secure an investment into property can be, there is also more money going directly into landlords’ pockets.
As mentioned earlier, during the rental market in Covid-19, UK rental prices have changed, with Rightmove finding the asking rent outside of London has hit a record £845, up 3.4% on the same time last year.
The rental market with coronavirus has clearly not had the negative impact that was first imagined.
While those statistics are substantial, the Office of National Statistics has found different findings, although they are still positive, with a 1.5% increase in the 12 months to June 2020.
All signs continue to point to the fact that now is an excellent time to invest during the Covid-19 pandemic.