Even through the lockdown, rental accommodation has continued to be in high demand as void periods have fallen. Here’s what’s happening in the UK rental market.
The UK rental market is continuing to remain in high demand, says a new report released by ARLA Propertymark. According to the Private Rented Sector Report, the number of new prospective tenants increased by 27% in January. From December 2020 to January 2021, the average number of new prospective tenants registered per branch increased from 64 to 81.
The report also shows the number of properties managed per letting agent branch fell. This decreased from 204 in December to 196 a month later. However, this is a small increase of five from January last year.
Mark Hayward, chief policy advisor of Propertymark, says: “Our latest figures clearly show that the rental market isn’t indicating any signs of slowing down as demand for rental properties surged last month.
“Letting agents are continuing to support landlords and their tenants during these ongoing difficult times, and it is imperative that tenancies are maintained to keep the rent flowing.”
Good news for landlords
Despite economic and job uncertainty, rents are holding steady. And many landlords are reaping the benefits of shorter void periods between occupation of their rental properties. The latest Goodlord Rental Index reveals average voids dropped by three days across England. The West Midlands saw the biggest drop with voids decreasing from 26 days in January to only 14 in February.
Toby Burgess-Smith, data analyst at Goodlord, states: “Our latest Rental Index, which analyses over 20,000 English tenancies each month, indicates that February was another strong month for the lettings market, with rents holding steady and voids falling as tenants start to look beyond the pandemic.”
Individual landlords’ experiences with void periods will differ vastly, most of which is down to location. For instance, in areas of extremely high demand, void periods are typically minimal. This is key for buy-to-let property investors, as it minimises the amount of time a property is not earning a rental income.
In addition, many tenants are also choosing to stay in their rental homes for longer. In January, tenants stayed in their rentals for 21 months on average, according to ARLA Propertymark. This is a slight rise from 20 in December and is positive news for landlords, as a good, long-lasting tenant means a reliable income.
Demand from tenants will vary depending on location. This is on a regional and local level. In the wake of the COVID-19 pandemic, location and property preferences have also changed. Many tenants are in search for more space. And with the rise of working from home, some tenants are looking to rent in areas with cheaper living costs. This is causing demand to rise in the north of England and Midlands.
In ARLA Propertymark’s Private Rented Sector report, Yorkshire and the Humber recorded the highest level of tenant demand in the UK. In January, there was an average of 138 new tenants registered per branch. The West Midlands followed closely behind with 127 new prospective tenants. This further illustrates the strong demand seen in areas of the north and Midlands.
Toby Burgess-Smith comments: “Following a better than expected performance for the lettings market in December and January, February figures provide additional cause for optimism for agents and landlords.”