The latest market snapshot produced by agent data suggests that rent increases have hit a new low as the Coronavirus impacts on the private rental sector.
ARLA Propertymark’s latest survey – for May – shows that many landlords chose not to increase rents in an effort to recognise the financial difficulties facing tenants as a result of the Covid-19 lockdown.
As a result, the number of tenants experiencing rent increases fell to 14 per cent in May – the lowest since ARLA’s records began.
This is compared to more than two in five agents witnessing landlords increasing rent in February, before lockdown began. This was also a large decrease compared to May 2019, when nearly half of tenants experienced an increase in rent.
Similarly, more tenants have been successful when asking for a rent reduction, with the number of tenants negotiating rent reductions increasing to 2.5 per cent in May – the highest since March 2019 when the success rate was 2.9 per cent.
As a result of the housing market pause, landlords were unable to show prospective tenants’ new properties and therefore, the average time properties were empty between tenancies increased to five weeks in May. This is the longest time properties have remained void between tenancies since records began as agents and landlords were unable to operate as normal between March 23 and May 13.
The number of new prospective tenants fell to 70 per branch in May, compared to 82 in February.
However, the level of pent-up demand during lockdown meant that despite the overall fall, this is still the highest level on record for the month of May since records began, with 60 new tenants registered in May 2018, and 69 in May 2019.
“Landlords and agents have been taking the brunt of the pandemic. They are aware of the financial difficulties facing tenants and have shown empathy with many landlords not increasing rents where they otherwise might have needed to. It’s important everyone aims to keep the rent flowing in order to sustain the market and help boost the economy following several months of uncertainty” explains David Cox, ARLA Propertymark chief executive.
Following the housing market reopening, the number of properties managed per branch rose to 208 in May. This is an increase from pre-lockdown when the average number of properties managed per member branch stood at 201. This figure remains the same year-on-year.
This post has originally been featured in Letting Agent Today.