Post Pandemic Renting: What do renters want?
We all knew the world would change after the pandemic, but has what renters are looking for in a home changed too?
Our lives have either changed or been shaped in a variety of ways by Covid – and some changes, which were forced upon us, are here to stay. Times have changed and things have shifted.
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And the needs, wants, desires and practicalities for renters, landlords and property managers haven’t been immune to the changes of the last few years. It’s not only what landlords and renters want from each other and properties that has changed. The rental market itself has undergone some huge shifts:
- Summer 2022 has seen house prices hit seven times the UK average income, which means more and more people will be turning to renting over buying
- The interest rate, which has risen five times so far this year, with more hikes expected, has also made renting cheaper than buying
- In fact, there is so much competition over finding somewhere to rent, that bidding wars between would-be tenants have broken out with people paying over the top rent and ‘selling themselves’ with family resumes to appeal to landlords who have their pick of tenants.
It has certainly been a rollercoaster!
The initial impact of Covid-19
When Prime Minister Boris Johnson first started his daily updates the clear message was to stay at home to protect the NHS. Some people fled the cities and moved back home to ‘bubble’ with family.
And conversely, some people became trapped where they were, unable to bubble up and needing to rent urgently. So instead of landlords being left with empty rentals, it actually caused many landlords to increase their monthly rent prices.
Difficulties in people’s relationships, whether partners, friends or just housemates, caused by being cooped up together for an unprecedented amount of time also forced people to find their own places to stay.
In an unexpected twist, the market prices of property skyrocketed due to the stamp duty holiday, which saw huge competition driving prices up. Many first-time-buyers who had been planning to buy now couldn’t afford to and had to remain renting, while many landlords wishing to expand their property portfolios found property too expensive to buy.
The government also placed a pause on eviction – and landlords found they suddenly couldn’t take that route in the event of non-paying tenants. This was an issue compounded by the fact that Rent Guarantee Insurance was taken off the shelves during the pandemic. Having learnt the value of it during the pandemic, there was a rush to buy it when it returned.
How have renter’s needs changed post pandemic?
The key things that renters want from a home has changed – a lot. At the beginning, there was something of a mass exodus as renters moved out of cities to more rural areas.
The dawn of working from home (which for many remains), meant people were no longer tied to the locality of their work.
Post pandemic, people have started to move back as they miss their old urban, social lifestyles. That being said, the rise of rentals with added extras, such as work, social, cooking, dining and exercise space has really taken off.
Developments like this, known as Build To Rent (BTR), are now spreading nationwide and out of the capital and larger cities.
Other renter needs which emerged as a result of the pandemic include:
- Virtual viewings. People started moving without viewing in person, to reduce contact and video viewings remain popular, as they are often more convenient, especially when looking to move cities
- Short-term agreements. The pandemic was a time of flux, with no one really sure what was going to happen next, so shorter-term rental agreements were needed and renters still enjoy having that option
- Outdoor space. With socialising, hobbies and access to the world beyond your front door drastically reduced, outdoor space evolved from being ‘nice to have’ to ‘need to have’
- More space and better facilities. As our world’s shrunk to four walls, more space became so important, as did better facilities such as smart technology and WIFI to enable seamless working from home.
How have landlord needs changed post-pandemic?
As house prices have continued to shoot up and, as of July 2022, Halifax reported that they had risen at their fastest rate in 18 years.
Many landlords decided to take the opportunity to cash in and sell up. Which has clearly caused a reduction in the amount of rental accommodation available and difficulties for would-be renters securing somewhere to live, further driving competition for the homes that are available.
The cost-of-living crisis and rising energy prices has also caused headaches for a lot of landlords.
The Government is working on strategies to make the rental sector better for both landlords and renters, but given the current leadership race in the wake of Johnson’s resignation, this looks to be low on their list of priorities.
The Bank of England has said it would ‘do whatever it takes’ to tame inflation and keep a recession at bay and one of Rishi Sunak’s last acts as Chancellor was to announce measures to ease the cost-of-living crisis. These have included council tax rebates for A-D band households and energy discount support for everyone.
Many mortgage lenders are encouraging anyone thinking of buying a property to strike now and lock in the current mortgage rate before any more inflation hikes. So if this is something you’re considering or you’re wondering about what to do about your remortgage, book a call with our advisors to find out more.
So with this package of improvements on the way, the sector, which has been turbulent, could be starting to calm down.