How COVID has changed the way we rent a home
A look back from 2022. How did covid change the rental market and what has permanently changed? We give you the lowdown.
Table of contents
The covid pandemic has changed the way renters look for homes. The worst restrictions may have gone. These included limits on viewings, letting agents forced to close and a ban on evictions.
Although letting rules may have tightened and loosened once again due to coronavirus, the home seeking process has changed for good for tens of thousands of office staff who now opt to work remotely.
And for most, remotely means from home with space for an office with a fast broadband connection and some outdoor space. Property portal Rightmove has analysed data from site users revealing where people would like to live and the dream homes they are looking for.
Where people want to live
A new way of working remotely from the office has reshaped the rental market. Renters want larger houses with an extra room for devoting to office space. They also favour homes with gardens or near green spaces.
Detached homes are the main objects of desire. Agreed sales of detached homes leapt last year - 38 per cent for five-bed properties and 26 per cent for those with four bedrooms.Cornwall has eclipsed London as the most searched place to live, with as many as 5 million searches a month during 2021. Neighbouring Cornwall, Devon was third. Nearby Dorset was also popular - jumping ten places up the rankings to tenth place.
The study shows a shift in city dwellers looking for a new home in a more rural location.
The number of Londoners making inquiries about homes outside the capital leapt from 32 per cent at the start of 2021 to 52 per cent at the end of the year. Rightmove says the trend is the same across the ten largest cities in the UK.
The hunt for more space
In January 2021, the most searched for private rented home was a two bedroomed flat. Now, the most searched for a home to rent privately is a two-bed semi-detached property.
Rightmove's Director of Property Data Tim Bannister said: ‚'The stand-out trends over the past year have been increased demand for countryside and coastal living, more people making the dream of a detached home a reality, and the increased appeal for a garden. The huge population of London means that traditionally it's the most searched for location on Rightmove, but the appeal of the coast and the countryside over the past year has seen Cornwall crowned the new capital this year.
More space has always been the most common reason for people moving home, but the evolution for many from balancing their laptop on the end of a bed last March to making an office a permanent addition to a home, whether that's by converting a bedroom, garage or garden shed, has led to a need for even bigger homes than before.
Government data shows 29 per cent of renters had someone working from home in April 2021, including 45 per cent of self-employed workers. Higher income earners are more likely to have a home office (62 per cent).
Landlord fortunes - rents and arrears rise
The fortunes of landlords have shifted along with these new market forces. Rent rises depended on if the agreement was pre or during COVID pandemic. Data from letting agent London Central Portfolio reports average rents in 2021 were 7.57 per cent above those agreed between March and December 2020.
But the data also showed rents agreed before March 2020 were 8.3 per cent higher than those agreed before March 2020.Although rents keep rising during the pandemic, the other side of the coin is rent arrears.
A government study shows seven per cent of private renters were in arrears in May 2021 with another nine per cent stating they were likely or fairly likely to fall behind with their payments during the following three months.
Another 17 per cent confessed they were behind with one or more bills, while 29 per cent of private tenants admitted they had dug into savings to pay the rent.
Renter priorities change
Overall, the pandemic has forced many private renters to reconsider if they can buy their own home.At the start of 2020, 59 per cent of private renters had ambitions of buying a home, but this slumped to 45 per cent by May 2021.
Nevertheless, letting agents belonging to the Royal Institution of Chartered Surveyors (RICS) forecast solid demand from renters and a shortage of homes to rent will drive rents higher.Half of letting agents report more inquiries from renters, while at the same time one in four saw the number of new homes to rent fall.
Given the mismatch between rising demand and dwindling supply, rents are anticipated to increase firmly over the near term. Over the next 12 months, contributors are now projecting a near four per cent pick-up in rents at the national level. Furthermore, over the next five years, respondents foresee rental growth averaging roughly five per cent a year said a RICS spokesman.
Virtual valuations and viewings
The legacy of the pandemic for landlords is a switch to virtual viewings and valuations.One estate agent, Leaders Group, carried out more than 40,000 remote viewings during lockdown.
Contact one of our experts today to find out how we can improve your property letting experience.
Our mission is to make the letting process much easier for landlords and tenants. We won't stop until we achieve it!
One of our letting experts will ensure you get the most value from your property