Lettings market demand rises as lockdown measures ease
As the economy continues to feel the pain from coronavirus related uncertainty, the latest report from the Deposit Protection Service (DPS) suggests demand for rental properties in the UK has picked up close to pre-pandemic levels. With property moves once again permitted - provided social distancing rules are observed - pent-up demand for new rental properties is being exercised.
In addition to that positive news for landlords, a separate survey from Rentround shows growing demand for letting agents' services. This comes as the Chancellor's temporary stamp duty holiday has encouraged more landlords and potential property investors to consider expanding their portfolio or entering the private letting sector.
New rental agreements rise
While government coronavirus measures included halting home moves to help limit the spread of the virus, once those rules were removed, the UK’s rental market bounced back pretty quickly, according to recent data.
Research from the DPS shows that after seeing just under 60,000 new tenancies registered in March, that number slumped to a little over 32,000 in April. However, once those health-related restrictions were lifted the DPS said they received a touch less than 56,000 new tenancy registrations in June.
Looking at the average deposit levels, the group’s quarterly data shows a mild increase from £775 in the first quarter to £782 in the second quarter. That also compares with an average UK-wide rental deposit of £770 in the second quarter of 2019.
In addition, the data showed that out of 12 regions across the UK, the average deposit level declined between the first and second quarters of 2020 in just three regions:
- South east England from £895 in Q1 to £886 in Q2.
- West midlands from £320 in Q1 to £618 in Q2.
- Scotland from £642 in Q1 to £638 in Q2.
That broad-based, albeit mild increase in average rental deposits also supports the view that demand for rental properties regained strength once Covid-19 related restrictions were removed.
Increased interest in letting agency services
Another positive development for the lettings industry appears to stem from the stamp duty holiday announced by the Chancellor of the Exchequer, Rishi Sunak, in July. According to property management comparison service Rentround, there has been an uptick in demand for letting agency services from landlords seeking to grow their existing rental property portfolio, or to make their first property investment purchase.
Specifically, they have experienced a 21% increase in the number of landlord searches for letting agents on its platform since the stamp duty holiday announcement. The regions with the largest increase in searches are:
- Manchester +33%.
- Newcastle +31%.
- East London +29%.
“The stamp duty holiday has brought a flood of positivity across the property market,” said Raj Dosanjh, founder of Rentround. “The increase in the number of comparisons run on our platform indicates landlords are looking to add to their portfolios, or that a new wave of landlords are looking to enter the market.”
Together, these two surveys suggest the future is positive for the UK’s lettings industry, which must be welcome news for many after a tough few months.