The unfreezing of the private rental market has been welcomed enthusiastically by all the key players but there are challenges ahead as the crisis continues to disrupt many aspects of the lettings process including viewings, referencing and evictions.
Landlords and other players in the private rental market have welcomed the re-opening of the housing market and the much-anticipated green light for people to move home freely within both the sales and lettings sectors.
The government today estimates that there are 450,000 homes moves wating to happen which were delayed by the sudden arrival of the Coronavirus pandemic, many of which are tenants looking to move home.
Ben Beadle, Chief Executive of the National Residential Landlords Association, says: “Tenants will now be able to look for a new home and move into it whilst those landlords who have unexpectedly faced empty properties will be able to put them back on the market.
“It is vital though that all viewings and house moves take place safely and in line with the Government’s guidance. We will continue to work with the Government, landlords and others to ensure that the risks of spreading coronavirus are minimised.”
But the revival of the market is not going to return the rental market to normal conditions, almost all commentators that LandlordZONE has spoken to.
“I think one of the biggest issues going forward is going to be referencing,” says Paul Shamplina of Landlord Action.
“Landlords are going to more nervous about taking on tenants when the lockdown is continuing to make job and financial security much less certain for millions of renters.”
Shamplina also believes the re-start of the market will see a flood of new rental stock entering the market and that this is likely to push down rents in the short to medium term. “There is going to be a rush of Airbnb landlords joining or re-joining the long-term rental market because the holiday short-lets market will remain closed for several months,” he says.
“Also, properties that have stood empty during the crisis can now be marketed again.”
But Shamplina wouldn’t be drawn on whether the early restart for the market might persuade the government not the extend the current evictions ban, which runs out next month.
“If there is a further extension of the ban if could be catastrophic for landlords who currently have cases going through the court system,” he says.
“But think overall landlords will be relieved that the market has restarted because on an unofficial level it will enable some to cut deals with non-paying tenants and agree a parting of the ways so that new tenants can be found, something which was hard to do until now during the lockdown.”
Nevertheless, buy-to-let investors may view the current situation as an opportunity, says Steve Olejnik, managing director of Mortgages for Business.
“We expect a temporary, short-term fall in prices across London and the south east in the region of about 15%, so there’s no question that if you invest in bricks and mortar now, with a bit of haggling during the process, you are going to see a lot of long-term capital growth. I think values will be back at February 2020 levels by the spring or summer of next year.”