Home rentals have been on the rise since the beginning of 2020, spiking dramatically after the first Covid lockdown. In the south of England, some areas are seeing the demand for rental properties increase by up to 60%. There has also been a noticeable push away from city markets in certain areas of the country, as people and families opt to rent properties in more rural locations.
As a result of the recent Covid19 pandemic, there has been a dramatic rise in the number of people working from home. This has driven many to leave the cities and look for larger homes outside of the metropolitan area that offer more in terms of space. Properties with garden spaces and areas have also increased in desirability. As commuting patterns shift and working from home becomes a way of life for may, different living options are being considered.
Subsequently, rental properties are in demand, the buy-to-let market saw numbers hit an all-time high in 2020. Demand is accelerating faster than supply in many areas, leading to some short term landlords converting their properties into long term rentals. Owners of homes and flats used for holiday lets through services like Airbnb have suffered financially during the recent travel restrictions. Converting vacation homes and short term rentals into long term leases has allowed landlords to retain income from their properties.
As the country is dealing with the implications of a third lockdown, data indicates that the home rental market will remain strong. Employment furloughs, layoffs, and economic uncertainty is causing more people to consider renting as an option. Until the market stabilises and the effects of the Covid pandemic abates, the rental market us likely to remain solid until at least the end of 2021.
Even with the new Covid vaccine being rolled out and people hoping for a return to normalcy, the rental market is still likely to see steady demand through 2021 and beyond. Some industry experts believe that rental prices could spike in 2021 while people shy away from home buying until the pandemic has subsided.
Major cities like Edinburgh, Manchester, and Birmingham are expected to see rental growth numbers of up to 16% in the next 3 to 4 years. Areas that have solid commuter connections will be favourable to support the move out to suburban and rural locations. Bigger homes are in higher demand, as are homes with gardens, as people being forced to spend more time in their homes have reassessed space and living needs.
The Covid19 pandemic isn’t the only economic driver that is making people choose to rent a home instead of buy, there is also the impact of Brexit. While the implications of Brexit may see changes in work and travel rules for many Europeans, the economic uncertainty surrounding the move will keep tenants renting for longer. Potential homebuyers are postponing the decision to buy until the market stabilizes and confidence increases.
Even with the high demands and future growth predictions for rental property, amounts charged for monthly rents may remain unchanged. For property landlords, Brexit means there is fewer international tenants, residency rules legislation, and tax changes may add further restrictions. However, the number of international students jumped in 2020, and with many returning for a second year in 2021, it may help to keep urban rental property markets afloat.