Coronavirus: Rightmove says break-ups fuelling surge in rental demand

Tom BelgerFinance and policy reporter
Yahoo Finance UK
Rents are rising nearly twice as fast as a year ago, according to an index. (PA)
Rents are rising nearly twice as fast as a year ago, according to an index. (PA)

Demand for rental properties surged after the UK government gave the green light for home moves in England in May, new figures show.

Miles Shipside, director of Rightmove (RMV.L), which released the data, said relationship breakdowns, job losses, pent-up demand and an easing of lockdown rules were likely to explain the rise.

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The property website’s figures show tenant interest, based on viewing data for its rental property listings, leapt 22% year-on-year in Britain in the week starting 18 May. The housing secretary Robert Jenrick had announced an easing of restrictions in England the previous week, sparking many estate agents to resume viewings and expand operations.

Jeremy Leaf, a north London estate agent and a former RICS residential chairman, also told Yahoo Finance UK: “We have noticed that the lettings market has particularly revived as tenants express dissatisfaction with unsuitable properties and relationships, and appreciate that making a move is much easier that way than perhaps buying.”

The surge marks a stark reversal of previous lockdown trends, which had seen demand far lower than a year earlier. A week after the UK went into lockdown at the end of March, visits on rental property listings were down 24% year-on-year.

READ MORE: UK homeowners can apply for another mortgage holiday

Demand in mid-to-late May saw the steepest gains compared with a year earlier in south-west England, the East Midlands and the West Midlands, where it was up around a third. London demand is up 17% according to the figures, made public by Rightmove and the BBC’s shared data unit.

But in Scotland, where the devolved government has eased fewer restrictions, demand remained down 11% year-on-year. Wales also saw only a modest rise, up 6%.

The figures show rental demand rebounding far more than demand for property purchases, though the latter is still up 4% year-on-year despite an economic crisis and ongoing lockdown.

Rightmove saw six million visits on 27 May, its busiest day ever.

READ MORE: Coronavirus sparks biggest monthly fall in UK property prices since 2009

“They may need to move for a job,” he told the BBC. “In this environment we are in now, there is a need for people with specialist jobs to be in a certain place - just think about the Nightingale hospitals that have sprung up.

"Where some people have enjoyed lockdown, others' relationships haven't survived it and this has had knock-on consequences. There could be people who need to move because of job losses too.

"And working from home has left a lot of people looking for a change in surroundings. Effectively we have two months of pent-up demand that needs to be satisfied."

Leaf added that increased virtual tours were also making moving easier, while further changes in the job market could also influence demand. “Looking forward, we do anticipate demand to continue quite strongly as younger people in particular find out whether the end of their furlough arrangement results in continuation of employment or redundancy,” he added.

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