It has been suggested that the private rental market is “unusually uncertain” after nearly two decades of growth, according to new reports and Nationwide’s chief economist, Robert Gardener.
It has been suggested that this is due to a shift in housing preferences occuring during Covid-19 lockdowns.
Analysis of official figures in the Rental Market Review found the quantity of households renting privately in England dropped for the third year in 2020. It fell to 18.7%, from 19.3% the previous year.
The report cited numerous reasons for the shift and suggested it started before the pandemic hit. They include increased regulation and tax changes putting off investors. Although it seems that the current pandemic has worked as a catalyst.
The review indicated that low interest rates were likely to boost demand from investors. However, it aslso showed that the sector may be vulnerable to ever-changing tastes during the pandemic. The number of first-time buyers has soared thanks to schemes such as Help to Buy and higher loan-to-value mortgages helping those with smaller deposits.
The multiple lockdowns across the UK have been characterised by the need to stay home, with many people feeling stuck inside. This has resulted in many people reconsidering their housing needs. It has also caused many people in bigger cities to want to move to areas with more green space and to properties with gardens.
A fall in people wanting to rent, the new government schemes put in place, new mortgage deals, and changes in tax for landlords means that the property market has shifted towards buyers. However, the higher demand for houses could mean that there is a shift in property prices as lockdown eases. For many though, lockdown has allowed for saving making 2021 the ideal time to buy.
BBC News (May 2021). Rental market unusually uncertain, Nationwide says. Accessed: https://www.bbc.co.uk/news/business-56966319