An analysis of the impact of Tier 3 restrictions on the lettings market in Leicester, which was under extra restrictions for more than 120 days, indicates that the current lockdown could slow the rental market in England despite house moves being permitted under the current lockdown rules.
Until 5th November, when the whole of England was placed under national lockdown, Leicester had been operating under a higher tier of restrictions since the beginning of July.
Despite house moves able to go ahead throughout, the analysis from Goodlord shows that the lettings market in the region saw a spike in activity immediately before restrictions were introduced, followed by a significant slowdown when year on year figures were compared.
The Leicester lettings market suffered a 22% reduction in tenancy completions when compared with the same period last year. This drop followed a rise in activity of 44% during the two weeks before the region entered Tier 3. A sample size of 1,000 tenancies from 27 lettings agencies were assessed as part of this research.
This data provides a strong indication that the month ahead will be a tough few weeks for the property market. Following an early surge in activity, the rate of new tenancies is set to slow significantly despite renters having permission to move house between now and December 2nd.
Following the latest national lockdown announcement on October 31st, UK-wide data began to show a similar trend, with an almost 8% uptick in lettings activity over the fortnight leading up to the national lockdown which came into effect on 5th November, as renters rushed to move. That surge is now dissipating.
The numbers indicate that most regions will see a decline in activity over the coming weeks. Although the slowdown is in no way predicted to be as sharp as the Spring lockdown - where market activity had fallen by 72% by mid-April - a reduction in new tenancy applications is predicted in addition to the normal cooling of the market that is typically seen during winter.
However, with the lettings market having enjoyed an incredibly busy summer thanks to an explosion of pent up demand, agents and landlords can likely look forward to a busier January than normal as December moves are put off until the new year.
Tom Mundy, COO at Goodlord, comments: “Despite house moves having been permitted across England since May, this analysis shows just how impactful local lockdowns have been on the lettings market. Leicester, which has been under additional restrictions for many months, has seen activity drop by a fifth compared to 2019.
"It’s hugely welcome that house moves can continue throughout the month ahead and we know that agents and landlords have been working extremely hard to make sure they are safe. The industry should expect a slowdown over the coming weeks but, as we saw earlier in summer, what the market bounces back, it bounces back strongly. I believe the underlying resilience of the UK lettings market will see it through to the brighter horizons that 2021 looks set to bring. ”
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