Belvoir’s Q3 post lockdown rental index reveals significant regional diversity, with evidence of increased tenant demand, property shortages and arrears in some areas. Average rental values have remained fairly flat for the past three years, but the UK’s largest High Street property management franchise, which has 300 offices nationwide, is predicting that continued high tenant demand, plus a shortage of properties is likely to result in increased rents in 2021. Belvoir continues to call for Government intervention to protect tenants who are becoming increasingly vulnerable to rent arrears.
Belvoir CEO Dorian Gonsalves says: “The Belvoir rental index, which has been tracking advertised rents since 2007, and is prepared for us by property expert Kate Faulkner, reveals an interesting emerging picture in the UK’s post lockdown market. In many ways the Q3 index confirms the resilience of the rental market, and a continued cultural shift towards renting as a lifestyle choice.
“In addition to the Q3 rental index, a cross section network survey confirms that house rents continue to outperform apartments, with offices citing high demand after lockdown, plus a shortage of properties as contributory factors. Our survey revealed that 82.5% of participating offices reported increased rents for houses in Q3 versus 2019. Although many of these offices are predicting that rents will continue to rise in Q4 and beyond, this is dependent on regional factors, making the Belvoir rental index an incredibly valuable resource for landlords who can see at a glance what is happening in England, Scotland, Wales and Northern Ireland, but can also zone in on how the rental market is performing in any particular region.
“Unsurprisingly during a pandemic, the average length of tenancies remains high nationwide, although this has been a trend for some time, with 41% of tenants opting to remain in their home for 19-24 months, and almost a quarter renting for over two years.
“The Q3 2020 survey revealed a 7% increase in the number of offices who experienced landlords selling up to three properties when compared to Q2. The number of offices seeing landlords selling 6-10 properties compared to Q2 also increased from 5% to 9%, but on the flip side, there was a decrease in the number of landlords purchasing properties to rent. Our survey revealed that no offices reported landlords buying six properties or more – a trend that has remained static since Q4 2019.
“Looking ahead to 2021, 90% of Belvoir offices surveyed are predicting that house rents will increase or remain static, while 82% predict that rents on flats will increase or remain static. Predictions regarding the likelihood of rising or decreasing rents vary from region to region, and even for offices within a specific region, so I recommend that landlords contact a reputable professional agent in their area to discuss how the market is likely to perform in their area before making any decisions about taking advantage of opportunities to expand their portfolios, or selling properties.
“Belvoir’s Q3 results confirm that despite the pandemic and ensuing recession, the market has in fact remained remarkably robust. However, there is undoubtedly an urgent need for further Government intervention and improved strategies to ensure that tenants are able to access and benefit from the same levels of assistance as homeowners. Without further Government support, such as the introduction of a tenant loan scheme similar to that already operational in Wales, there will be increased risk of further rises in arrears and more likelihood of landlords selling up. This will result in further shortage of good quality rental properties and will leave tenants vulnerable to rogue landlords offering substandard accommodation.”