The latest information on rents and from the Belvoir rental experts, shows that the market post the first pandemic lockdown continues to perform very differently across the UK.
The main ‘takeaway’ is how well properties continue to rent in most places, whatever happens to the economy, even when it comes to a ‘full stop’ as it already has twice this year.
The best bit of news is that home moving has been allowed to continue, despite a second lockdown. This allows new rental properties to be let and if tenants want to leave existing homes, they can re-let. Of course, the bad news is that if a tenant doesn’t pay their rent or causes issues, it’s very difficult to currently evict them.
Latest essential ‘takeaways’ for landlords
There are five key things to know from this quarter’s rental index: –
- Nationally rents have hardly changed
The index shows that, on average, rents for the UK in Q3 2020 were £747 per month, which showed a very slight fall versus 2019’s Q3 average of just -1%, which considering the economic ‘destruction’ over the last few quarters shows how robust the rental market is, even when the economy isn’t.
- At a local level, some rents are up, some down!
Whether it’s Brighton and Hove where Nathan Crombie reported “increased rents and demand for houses and flats during Q3 2020 and anticipates rents to continue rising over the next quarter, with demand decreasing.” Or in Edinburgh where Lisa Conquer explains “rents remained unchanged across the board, whilst tenant demand increased for all properties due to previously following a stricter lockdown.” Although most rents are static to rising, each area and property type can be showing different trends, so it’s vital to get expert opinion on what’s happening to rents from local experts such as Belvoir if you are thinking of investing into buy to let, selling your existing rentals or re-letting to a new tenant.
- Houses are, in the main performing better than flats
According to the individual experts from Belvoir, around 40% of offices saw flat rents unchanged or falling, while 60% increased, still mostly good news! In contrast a staggering 83% of offices saw house rents rise, with hardly any falling and the rest remained unchanged.
- Arrears are on the up
To be expected due to the current circumstances, but rare when letting through Belvoir, 70% of offices normally report less than three tenants in arrears per office, whereas in Q3 this fell to just over 30%. And although this was a trend that started pre-Covid, around 50% of offices are now seeing rent arrears from 4-10 tenants. It isn’t yet time to worry as this still equates to less than 3% of tenants.
- Number of properties available for let, in the main is tightening
Although some landlords are still buying new properties to let, around 44% of offices saw no additional properties bought by their landlords, while just over 80% of offices saw anything up to 5 properties being sold. For those landlords staying in the property market, tenants are currently tending to stay in properties for longer, this will restrict the number of properties coming onto the market in many areas.
Regional, local town and city level… what’s happening?
The Belvoir Index is a little different to other rental indices in that we don’t just rely on ‘stats’ from a spreadsheet, we survey a range of individual Belvoir experts so we know exactly what’s happening to rents at a local level now and what’s expected to happen in the future.
It’s this level of detailed knowledge ‘on the ground’ that’s vital for investors and landlords to know what’s really happening to existing rents and newly let properties, rather than relying on national or regional data which can be heavily skewed, or indeed out of date.
Here’s a snapshot of some of this quarters expert commentary:-
Marcin Owczarek of the Bournemouth office reported increased rents and demand across the board for Q3 2020 and expects this trend to continue into Q4 2020. The office has a shortage of all properties.
For more detailed reports from offices in the South West, including: Devizes, Christchurch and Gloucester, please read the full report.
For Q3 2020, William Venter confirmed decreasing rents and demand across the board. Looking forward to Q4 2020, both rents and demand for all properties are expected to remain unchanged. The Watford office is currently short of two bed flats, but has an excess of smaller flats and three, four and five bed houses.
For more detailed reports from offices in the South East, including: Tadley, Harlow, Tunbridge Wells, Thanet and Brighton and Hove, please read the full report.
According to Lloyd Rumbold both house and flat rents increased over the course of Q3 2020, with demand remaining static for all properties. Over the next quarter, rents across the board are likely to increase with demand increasing for houses but remaining unchanged for flats and room rents. Nottingham has a shortage of studio flats through to three bed houses.
For more detailed reports from offices in the East Midlands, including: Melton Mowbray, Newark, Bedford and Milton Keynes, please refer to the full report.
For Q3 2020, Rosie Callaway confirmed static rents and demand across the board but expects rents to decline over the next quarter with demand remaining unchanged. Rugby has a shortage of three bed houses and an excess of one/two bed flats.
For more detailed reports from offices in the West Midlands, including: Leamington Spa, Stoke on Trent, Shrewsbury, Stafford and Stone, Telford, Evesham and Stratford upon Avon, please read the full report.
According to Ben Davies, all rents and demand increased during Q3 2020, however, rental levels are expected to remain unchanged for Q4 2020 with demand decreasing. Swansea has a shortage of one bed flats and an oversupply of two bed flats.
For Q3 2020, Trevor Burns has confirmed increased rents and demand for all properties with this trend likely to follow into the next quarter due to a lack of supply and continued high tenant demand. The Newtownards office is experiencing a shortage of all types and sizes of property.
According to Michael Green of the Burnley office, rents for flats and houses increased across the board due to a shortage of all property stock during Q3 2020, with demand also increasing for all properties. Looking to the next quarter, it is predicted that rents are likely to remain unchanged but demand increasing for all properties.
Yorkshire & Humber
According to Chris Duffy, during Q3 2020, rents increased for flats and houses. Tenant demand also increased for all properties. Rents are expected to continue rising over the next quarter due to the high demand/shortage of stock, however, demand is likely to remain stable. Doncaster has a shortage of all types of property.
For a detailed report from the Skipton office, please read the full report.
Newcastle upon Tyne
Howard King reported that rents for city centre flats increased but not for flats in the suburbs, whereas all house rents increased across all areas during Q3 2020. Tenant demand remained unchanged for flats, increased for houses and fell for HMOs. Over the coming quarter, rents for both flats and houses are expected to remain unchanged with room rents decreasing. However, tenant demand is likely to increase for all properties with the exception of room rents which are likely to decline. There is a shortage of studio flats through to three bed houses.
For a detailed report from the Tynedale office, please refer to the full report.
For Q3 2020, Gillian Inglis has confirmed increased rents and demand for all properties but expects rents to remain unchanged over the coming quarter, with demand increasing. The office is experiencing a shortage of one, two and three bed properties.
For more detailed reports from other offices in Scotland, including: Edinburgh and Dundee, please read the full report.