The rental market is unusually uncertain, says nationwide

A person looking at a real estate agent's window.

A person looking at a real estate agent’s window.

According to a new report, the outlook for the private rental market is “abnormally uncertain” after nearly 20 years of growth.

This suggests that the future is clouded by “economic uncertainty” and changing housing preferences during the blockade.

“The outlook is unusually uncertain due to the impact of Covid-19,” said chief economists across the country.

This review was conducted by Mortgage Works, Nationwide’s buy-tourt division.

“In addition to the great uncertainty surrounding the short-term course of the economy, pandemics could have a profound impact on economic activity and patterns of housing demand over the next few years,” said Chief Economist Robert Gardner. Said.

According to an analysis of official figures from the rental market review, the proportion of privately rented households in the UK declined for the third consecutive year in 2020. It decreased from 19.3% in the previous year to 18.7%.

It quoted several reasons for the shift that began before the pandemic occurred. This includes tightening regulations and tax reforms that put off investors.

Between 2017 and 2020, the number of fully owned rental properties fell by 12%, he said.

This review suggests that low interest rates are likely to boost investor demand, but the sector may be vulnerable to changing preferences during a pandemic.

The number of first-time buyers is increasing against the backdrop of schemes such as Help to Buy and increased availability of higher loan-to-value mortgages to help those with low deposits.

And as many tenants and homeowners are stuck during the blockade, people have rethought their housing needs.

The review found that 40% of the 3,000 people surveyed at the end of April were most likely to have or are considering moving a private lessor during a pandemic.

People in London said they were most likely to consider relocating and tenants were looking for more green space or larger properties.

Cornwall real estate

Countryside locations such as Cornwall are becoming even more popular among house hunters.

Landlords warned that if demand permanently shifts from apartments and terraced houses in large towns and cities where most private rentals are found, they could lose in “space competition.”

Chris Norris, Policy Director of the National Residential Landlords Association, said a more flexible leasing system is needed to get out of the pandemic.

“As we move out of the blockade, the agile and flexible leasing sector is more important than ever, as tenants seek to move and many are reluctant to make large purchases until future employment prospects are clear. It has become. “

He urged the government to consider a financial package to repay the rent debt accumulated as a result of the pandemic as part of this.

Resolution Foundation Report According to an announcement in March, Covid caused nearly 500,000 households to lag behind in rent.

The ban on eviction of peasants by British landlords, introduced during the pandemic, It was extended several times It is currently scheduled to expire at the end of May.

Ministers suggested that the government introduce a “new approach” from June, with no further extension.

A spokesman for the Ministry of Housing pointed out that a longer notice period of six months is still in place.

They said the £ 352 billion support package during the pandemic “allows private lessors to continue to pay rent, preventing widespread rent delinquency and helping landlords. “.