The latest Goodlord Rental Index has shown rents dropping across five out of eight UK regions monitored during April, as the lockdown continues to impact the lettings markets. At the same time, void periods have shifted throughout the month, with some regions faring better than others. Overall, April saw volumes of new and completed tenancies drop rapidly in the run up to Easter before rebounding and finding equilibrium towards the end of the month.
Following a surge of pre-lockdown activity in March, rents dipped across the majority of regions monitored by Goodlord during April. Average rental costs for the UK as a whole slipped by 2%, from £878 to £861 per property, per month.
Wales and the West Midlands saw the biggest drop in rental costs, with both regions recording decreases of 6%. The North East saw a 4% dip, followed by 2% reductions in average rents for Greater London and the North West.
Prices in the South West held steady. But it was a more positive picture in the South East and the East Midlands, which both recorded 1% increases in average rental costs.
Average Void Periods
The picture was also mixed for void periods. Void periods dropped by two days in East Midlands, Greater London and the North East. But marginal increases were recorded in the North West (3 days), South East (2 days), and the South West (5 days).
April proved a tale of two halves for the rental market, with Goodlord’s Lettings Activity Tracker recording a steep reduction in tenancy applications and completions during early April, before rebounding after Easter and finding a level of consistency towards the end of the month.
Following a steady decline in both new and completed tenancies applications (when compared to year on year figures), rates of both new and completed tenancy applications appear to have levelled out at around 55% compared to last year’s statistics, meaning the market is currently operating at half its normal capacity.
However, industry experts, such as ARLA Propertymark’s David Cox, predict a surge in demand for rental properties once the lockdown restrictions are lifted.
Tom Mundy, COO at Goodlord, comments:
“Everyone in the industry is doing what they can to cope with an unprecedented set of challenges. With restrictions on movement continuing, it’s no surprise that market activity is significantly down year on year, and that rents and void periods are fluctuating across the regions. There is some comfort to be taken from our lettings activity tracker, which shows a new level of consistency in market demand over the past week. Whilst a halving of activity year on year remains a crippling statistic for the industry, we also believe a huge amount of pent up demand will be released once lockdown lifts. Agents who are able to plan ahead for this, and can ensure their strategies adapt to the new normal of social distancing, will be in a strong position to capitalise on that surge.”