There has been a sharp rise in demand for rental homes as more people start planning for life after the existing lockdown, new figures show.
Demand for rental property increased by 30% in the two weeks to 14th April, although it is worth noting that this hike comes off a low base following the impact of coronavirus, which saw a 57% fall in demand for rental housing in the two weeks to 30th March, according to the latest Zoopla Rental Index.
The Covid-19 pandemic has had a devastating impact on the rental market, with demand from renters still 42% lower than at the start of March.
However, the impact of coronavirus has been less pronounced in the letting market compared to the sales market.
The rental market is more dynamic than the sales market and increased uncertainty means households looking for a home will turn to the rental market first to meet any immediate housing need.
But while activity levels are likely to rise more quickly in the rental market than the sales market once the coronavirus lockdown eases, there is still likely to be a noticeable annual drop in rental market activity.
There are typically around 1.2million moves a year in the rental market, but Zoopla predicts that this could fall 25% over 2020, compared to 2019.
According to the Zoopla rental index, the annual rate of UK rental growth flattened in March - reflective of seasonal trends rather than ramifications of the coronavirus lockdown.
Rents were up 2.4% on the year, compared to 2.5% annual growth in February and the 2.3% recorded in December 2019.
Despite the slight slowdown in growth, rental growth has been on a largely upward trajectory since March 2017 amid increased demand and shrinking supply.
“The flexibility of the rental market is one of the key factors which has allowed activity to bounce back more quickly than other parts of the property market,” said Gráinne Gilmore, head of research, Zoopla. “The rise in demand in the first two weeks in April indicates that some tenants are already mapping out their next move.
“As with the whole housing market however, activity levels and rental growth will likely be closely aligned to the economic landscape of the UK once the lockdown eases and the immediate impact of Covid-19 starts to recede.
“Rental growth has increased steadily for the last 3 years as demand has increased in the face of dwindling new supply. However, If the responses to COVID-19 contribute to a rise in unemployment, as some official bodies have forecast, this will reduce the scope for any additional growth in rents. We expect growth to moderate this year, but to remain in positive territory.”