How Has Covid-19 Changed the UK Rental Market?

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 21.1% growth by 2025.

The North West, in particular, is set to boom, with a staggering 28.8% increase in house prices by 2025.

If you want to get involved in North West buy to let property investment, be sure to check out RWInvest’s exciting opportunities with properties like One Baltic Square in Liverpool and Merchant’s Wharf in Manchester.

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.

The number two and three features have also dramatically switched.

Coming in at number two is the need for outdoor space, with being close to a park or having access to an outside green space ranking at number three.

These features have been catapulted forward in the rankings from the 7^th and 9^th spots, respectively.

Onsite security has gone down from 3^rd to 4^th and perhaps most surprisingly, the need for excellent transport links has went from the top spot all the way to 5^th.

Property company Rightmove has also noticed habit changes.

They have found that 37% now want space to work at home, 35% want fast broadband and 31% want a garden.

Interestingly, affordability is now considered less important comparatively, with only 28% citing it as vital.

It’s unclear whether or not these changes will persist in the rental market post Covid-19, when the world returns to some semblance of normal.

Regardless, in the current market, home offices, some form of outdoor space and fast broadband seem an attractive feature for tenants.

These habits haven’t just impacted what properties tenants want, but they have also impacted how tenants (and investors) want to see properties.

Capitalising on VR technology, companies like ourselves at RWInvest have started to provide online viewings with virtual tours and screenshares.

This seems to be the next normal for property investment with investors wanting to remain safe.

The market seems to have got more congested too.

With a lack of travel, both international and domestically due to restrictions, many landlords who own holiday lets have opted to put their houses up for long-term rentals.

The Guardian reports this has led to a 41% increase in stock levels in London.

It’s clear that competition in the market is increasing, and now may be the time to act to get ahead of the curve.