The rental market crumbled early last year and is showing signs of recovery that are still active today. This is according to a report by the proptech firm Goodlord, which regularly reports on the rental sector.
By the time the first lockdown measures took effect, the number of new applications had plummeted by 72 percent. Reducing market activity by three-quarters compared to the same period in 2019, and the number of leases fell by 88 percent over the same period. Demand for rental housing has been rising gradually since April 14. But Goodlord said that while the recovery is still well below 2019 levels, it gives players hope that the worst is now behind them.
In the seven days to May 1, new rentals rose steadily as tenants caught up. The number of new applications rose by 45 percent, while the number of leases rose by a whopping 88 percent when market activity peaked.
While these increases are still well below 2019 levels, they reflect continued demand from tenants for new homes. A temporary change to the tenancy law introduced at the end of March made it easier to enter into a lease without personal contact between the agent and the tenant.
Goodlord’s data suggests that letting agents are using new measures to secure leases that cannot be deferred. The last month has been extremely difficult for brokers, and the number of outstanding rental applications is unprecedented in modern history. But now there is a glimmer of hope, “says David Goodlord, chief executive of the Goodlords UK, the UK’s biggest estate agent.
The figures show initial signs of an increase in the number of outstanding rental applications, but not at pre-closure levels.
It goes on to say that “if this proves to be true, maintaining a level of subsistence demand will prove crucial to the ability of actors to survive duration and social distance constraints, and to maintain levels of income and employment, and to maintain the level and subsistence of demand without turning to completely distant stocks.”
Many steps have been put on hold for a few more weeks, which means that demand is building up, and it is already seeping in, as you can see. However, once restrictions on passenger transport are lifted, we are forecasting a much more marked recovery in the market. Sales will be hit harder as people delay getting on the property ladder and instead continue to rent. Operators who can travel the route have a better chance of recouping their losses once the restriction is lifted.