UK Rental Homes Rise to Record High in 2020
A recent survey snapshot suggests the number of rental homes across the UK rose to a record high in 2020 with letting agents managing over 200 properties on average. The survey also shows that even as many landlords and property investors chose to sell up, only around one third of tenants experienced rent rises.
The details of the report highlight the effects of the coronavirus on the sector. However, even despite the difficulties and uncertainty the pandemic has had, it suggests the overall UK rental market has expanded, while landlords are proving supportive to their tenants as much as possible.
Letting Agents Managing More Properties
The latest annual, end of year survey from the Association of Residential Letting Agents (ARLA) shows that the average number of rental properties each of its member letting agents are managing has risen to 203 in 2020. That’s the highest number of record and up from 199 in 2019. A new monthly record high was set in October 2020, where the average number of properties being managed per letting agency branch reached 213.
That increase in letting agency activity came even as there was an increase in buy-to-let investors selling their rental properties. The average across 2020 was four sales per month, although in February and September an average of five investment properties were sold. Those sales suggest that many private rental sector (PRS) landlords have found the combination of increased regulation and the effects of the Covid-19 pandemic too much to manage.
Fewer Tenants Experiencing Rent Hikes
Another interesting detail from the survey is that the proportion of tenants paying higher rent has fallen. Some 36% of PRS tenants saw their rents rise in 2020, down from 44% in 2019. However, the majority of the drop is likely related to coronavirus rules preventing tenant fees ban-related rent hikes.
Turning to ARLA’s monthly measure of rent increases, in November 28% of tenants said they had experienced an increase in their rent, down from 37% in October and compared with 32% in November 2019.
“The continuing fall of increased rents in particular is testament to the understanding being shown across the sector,” said ARLA Propertymark’s chief policy advisor, Mark Hayward. “As the UK experiences ever-changing lockdown measures and regional restrictions, it is vital that tenancies are maintained to keep the rent flowing, as the stability of the private rental sector is essential to the wider economy’s bounce back from the COVID-19 crisis.”
Looking ahead to 2021, as with so many things right now, much uncertainty relating to the pandemic remains which is making a forecast on rents and the number of rental homes and tenants difficult to make. However, where a tenant has built up a good relationship with their letting agent and/or landlord, the best thing to do is to retain that and plan for the future as much as possible while remaining a little cautious, too.
