The UK lockdown, due to COVID-19, has left many people in limbo causing uncertainty within the real estate industry. Lockdown has restricted human contact and movement around the UK since 23rd March, meaning face to face property viewings have been off the cards.
Inevitably, this has contributed to a halt in UK property sales, with the demand from buyers falling by 70%. However, from seeing a 30% recovery in April after an initial 50% decline at the beginning of lockdown, according to Zoopla, property rentals are now showing annual high growth rates.
Why are rentals rising while house sales are declining?
The large decline in the number of house sales can be seen to be the result of the UK furlough scheme. According to Statista, 8.7 million jobs have been furloughed as of 31st May 2020, resulting in a large proportion of the UK now living on a reduced income. These income reductions and job losses have led to greater financial uncertainty amongst buyers. With house mortgage approvals in April being down 80%, compared to February 2020, according to Nationwide, it’s no surprise that many house purchasing plans have gone astray.
Although rentals initially took a hit during the pandemic, the downfall of property sales has proved beneficial for lettings. Rightmove reports that the demand for lettings in the UK has increased by 22% compared to this time last year. The postponing of property purchasing plans is causing many people to turn to long term property rental, with the first week of June showing the weekly rental demand of new tenants being 40% above the five-year average, according to Knight Frank. But why is this?
We all know that renting offers flexibility and, in a time of uncertainty, caused by job insecurity, those who were looking to buy a property are now, instead, looking to rent. The South West region is seeing the biggest rise of 34% in demand for rental properties, according to property giant Rightmove. Alongside this, the average rental price being up 2.7% from last year, makes it safe to say the rent demand has firmly overtaken the sales demand.
A New Approach to Renting
When an immediate need for housing quickly occurred as many people found themselves needing accommodation for the unforeseeable duration of lockdown, platforms such as Bunk were able to offer a safe, virtual rental process. The accessibility and use of virtual property tours are on the rise with the number of web viewings for rental properties being 33% higher than the five year average in the first week of June, according to Knight Frank. The wider housing market has adopted digital tenancy agreements and contactless handovers, but here at Bunk our entire rental journey is contact-free and satisfies both tenants and property manager’s requirements.
Not only does property management software enable safer renting during these unprecedented times, but they also catalyse the overall tenancy completion process. So, with the demand for renting at an annual high, if you were considering selling your property, perhaps have a re-think because now is a good time as any to start letting. Here at Bunk, our property management software has enabled us to complete tenancies from advertising to move-in in less than 3 days during the peak of COVID-19. If you want some help filling your rental property, book a demo, and see how Bunk can introduce you to a whole new way of managing your rental property.