A survey of 550 UK lettings professionals and 1,700 tenants has shown that the increase in arrears has stabilised over the past 12 months and the rental market is showing strong signs of optimism from both tenants and agents.
The Goodlord and Vouch State of the Lettings Industry report takes the temperature of the lettings market every twelve months. The latest report is set to be released in full on Wednesday 15th September. Sign up to the Goodlord mailing list to receive the report when it's launched.
According to the survey of 550 lettings professionals, the speed at which households are falling into rental arrears appears to have slowed, despite the recent end of the evictions ban and the tapering of the furlough scheme.
Lettings professionals taking part reported a significant slowdown in the number of tenants finding themselves in arrears. Compared to September 2020, when the last survey was conducted, the number of lettings professionals reporting an increase in arrears over the past year has halved from 64% to 32%. 14% of agents reported a decrease in arrears.
However, arrears do remain an ongoing cause of concern for lettings agents, with 48% citing no change to the level of arrears compared to the 12 months leading up to September 2020.
Tenants, on the other hand, are feeling optimistic. Only 6% of the 1,700 tenants surveyed said they are concerned about the pandemic affecting their ability to pay rent. A huge majority of tenants - 75% - now believe their income is secure.
Four percent of tenants said they had missed some payments or organised a payment plan in the past year. However, the vast majority of tenants - 81% - said that the pandemic had not had any impact on their ability to pay rent in the past year. This is despite the fact that, of the tenants surveyed, 24% had been furloughed at some point during the past 12 months.
Most tenants also predicted that they will remain in the rental sector for many years to come. 54% said they would not expect or weren't sure if they would own a property in the next 5 years. Less than half of tenants - 46% - said they did expect to own a property within 5 years.
Tenants also reported a decrease in their desire to move or relocate. Only 16% of tenants said they had moved or considered moving as a result of Covid-19 in the past 12 months - a decrease of 11% on the previous year. Those who did move, however, intend to stay. 80% of those who moved to a different area in the past year as a result of Covid-19 don't intend to move.
Tom Mundy, COO of Goodlord, comments: “The letting industry has proved surprisingly resilient over the past 18 months. The pandemic did drive a steep uptick in arrears during the first 6 months, but our data and the results of this survey indicate that the pace of this has significantly slowed since last September. This is good news for tenants, landlords and agents as various Government support schemes come to an end. The optimism displayed by tenants around their financial security is also encouraging, although the rush to move to new areas of the country seems to have abated for most!”
