Landlords will be heartened by the results of a new rental index into letting demand. But they may despair when confronted by another survey – this time into how many renters are expected to fall into arrears.
The ‘positive’ note for landlords comes from the proptech firm Goodlord, whose rental index, published this week, reassures UK landlords that tenant demand hasn’t fallen victim to the hazards of coronavirus.
Letting agents’ phones ‘red hot’ as demand builds
Quite the opposite in fact. Pent up demand has seen queries for new rental properties soar. As many had already predicted, once restrictions on the market were lifted, estate agent and landlords’ phones went red hot.
To the extent that figures for the first two weeks in June far exceeded those of the previous year. On June 2, for instance, rental applications were 112 per cent higher than on the same day in 2019. On June 10 that already-high percentage figure rose to a record 124 per cent compared to the previous year.
The volume since June 7 has been particularly striking, according to the Goodlord index, with more completed lets since that day that the average for 2019 as a whole.
One third of renters worried about payments
But what about existing tenants? The news here isn’t quite so appealing to landlords. That’s because a survey by the research company Joseph Rowntree Foundation (JRF) reveals as many as 30 per cent of current tenants fear they will be struggling to pay rent following the end of the government’s furloughing scheme. That equates to around 250,000 renters.
Meanwhile, around 42 per cent of renters in the private sector have already seen financially impacted as a result of coronavirus restrictions on working practices.
Boris Johnson confirmed this would no longer continue after the end of October. It is then that many companies, no longer able to afford as many staff, may start making redundancies.
The independent JRF used a UGov poll to base their findings on earlier this month. It amassed results from 1,031 individuals in private rented accommodation throughout the UK. Their findings showed many renters would be forced to turn to government support to help pay their rent. At the moment private renters can access money to pay rent via the Local Housing Allowance (LHA).
Renters still faced with shortfall – despite LHA
However, the rate they receive is based on calculations of the least expensive rentals in their particular area. In other words, they may still end up with a shortfall. In Brighton this would equate to around £150 for renters to find. In Manchester it’s around £100 short and in Liverpool the discrepancy is £80. In some areas of Central London that gap could be as much as £1,700
In order to prevent ‘mass evictions’ the JRF are urging the government to increase the LHA to cover median rents and to abolish the financial cap altogether.
Get in touch
Are you currently renting and looking to move? Or perhaps this is your first time renting? If so, see our rental advice articles on our website griffinlettings.co.uk where you can also write to us via our Contact Us page. Meanwhile you can also call us on 0345 561 0050 (24hr)