UK residential rental demand drops in Q4 as landlords are hit hard by Covid-19
The latest Rental Demand Index for Q4 from lettings management platform, Howsy, has revealed that demand for rental homes across the UK’s major cities has dropped -9 per cent since Q3.
Howsy’s index looks at rental listings across all of the major property portals, taking an average demand score for the nation’s major cities based on where has the highest number of properties already let as a percentage of all rental listings.
The research then highlights where the highest level of tenant demand currently is based on this supply/demand ratio.
The latest index shows that the average rental demand across 20 major UK cities is currently 27 per cent, having fallen -9 per cent in the last quarter. However, on an annual basis, rental demand is still 8 per cent higher than Q4 of 2019.
Belfast has seen the largest decline in rental demand, down -23 per cent between Q3 and Q4 of last year. Bristol has also seen one of the largest declines in demand for rental homes, down -20 per cent in the final quarter of last year.
Swansea (-16 per cent), Portsmouth (-16 per cent), Glasgow (-14 per cent), Cambridge (-12 per cent), Southampton (-11 per cent), Nottingham (-11 per cent), Bournemouth (-10 per cent) and Cardiff (-10 per cent) also rank within the top 10 for the largest declines in rental demand in the final quarter of last year.
Just Newport and London have seen an increase in rental demand, although at one per cent, the increase has been marginal.
Founder and CEO of Howsy, Calum Brannan, says: “There’s no doubt that the ongoing issues caused by Covid have continued to hit landlords hard, with rental demand dropping across the vast majority of the UK’s major cities. This has been largely due to the growing trend of working from home, as many no longer need to rent at a higher cost in order to be within a commutable distance to their place of work. Of course, many tenants will have also found themselves struggling financially and this will have also caused a reduction in demand for rental homes.
"Hopefully, we should start to see this trend reverse over the coming months as a vaccine enables many of us to return to some form of normality. However, with landlords already facing a tough time trying to turn a profit as a result of multiple changes to government legislation, it may be some time before the buy-to-let sector recovers from a stock supply point of view.”