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Rental moves predicted to fall by a quarter in 2020

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  • 21/04/2020
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Rental moves predicted to fall by a quarter in 2020
The number of rental moves is expected to drop by a quarter over 2020, as the impact of the coronavirus is felt across the market.

 

There are 1.2 million moves a year in the lettings market, and this is expected to fall to 900,000 this year, according to property listings site Zoopla.

It comes as tenant demand for homes was measured at 42 per cent lower than at the start of March before the UK’s lockdown began.

In the two weeks to 30 March demand dropped off a cliff edge, initially falling 57 per cent.

Since then, there has been some recovery with interest increasing by 30 per cent in the two weeks to 14 April.

Flexibility in the lettings market, with agents agreeing rental contracts with delayed start dates, and agreeing terms based on online viewings, has meant activity has continued throughout the lockdown, albeit at a significantly lower rate, according to Zoopla.

 

Positive start

Supply had increased ahead of lockdown, as landlords switched from short-term lets to longer lets, the site said.

Landlords have not removed listings since lockdown started.

Annual rental growth in the currently UK stands at 2.4 per cent, up from 1.5 per cent in March last year, but growth is now expected to moderate over the rest of the year.

Gráinne Gilmore, head of research, Zoopla, said: “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 three 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.”

 

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