Our property expert Gráinne Gilmore, head of research at Zoopla, reveals the figures that show how renters and landlords are currently affected by the coronavirus lockdown.
5 million households currently renting
Around five million of these households live in privately rented homes.
The lockdown has meant there are challenges for renters and landlords who were in the middle of negotiating a new tenancy agreement, while the wider economic picture driven by the coronavirus pandemic means that there may be financial difficulties for some renters and landlords.
1.2 million rental moves
There are usually around 1.2 million moves in and out of privately rented property each year. This activity is particularly pronounced in the summer and early autumn as renters look for new property to coincide with the start of the school and university years.
The coronavirus lockdown has therefore come before the peak of market activity, although ordinarily tens of thousands of rental deals would still be expected to happen every week.
As millions of tenants and landlords know, the private rental market is more flexible than the sales market, with those renting able to move in to a new property within weeks.
Under normal market conditions, the turnaround between listing a rental property and letting it is 18 days, compared to the months it takes to finalise a property sale.
Agents’ use of virtual tours for rental properties - as well as for houses and flats for sale - has meant that rental deals have continued, even during lockdown, with landlord and tenants agreeing flexible terms on moving in dates, dependent on when the lockdown ends.
1.2 million mortgage payment breaks
The government was quick to announce measures that would help tenants and landlords who were experiencing financial difficulties.
As a failsafe, to ensure no tenants fear losing their home if they are unable to pay their rent, the government extended the eviction notice period from two to three months from 23 March, This means any notices served under this new rule cannot be enforced until 23 June at the earliest.
Landlords who have a rental void because a tenant is unable to move in can apply for a three-month mortgage payment holiday. Landlords whose tenants are struggling to pay can also minimise their own financial cost by also applying for a mortgage payment holiday.
However, the payment holiday is just that - the capital sum owed will remain unchanged, and the interest payments will roll up for three months and then be applied once the landlord resumes payments.
UK Finance, the industry body for banks and building societies, says that around 1.2 million mortgage holders are now on a mortgage holiday. That's around one in nine of all mortgage holders, encompassing homeowners and buy-to-let landlords.
45% of landlords
It is estimated that around 45% of landlords own their property outright. Therefore they cannot offset any fall in rental income by using the mortgage holiday. While they have a large asset in the property itself, there may be dependencies on the regular income.
Data from 2018 shows that around a third of landlords say they rent out property to partially or fully supplement their income.
Once the lockdown eases, with ministers saying this could now be in early May, landlords who currently have a void period can respond to local market conditions to find a tenant.
What can we expect to happen when lockdown eases?
Given the greater flexibility in the rental market, activity is likely to bounce back much more quickly than the sales market, once lockdown restrictions are eased.
Prospective renters are still looking at properties online. The much less onerous legal requirements for signing a rental contract and the quicker turnaround time from viewing to moving mean the rental market could see pent-up demand being released quite quickly.
There has been little change in the total number of properties listed for rent, and many agents are working remotely. So tenants who want to plan their next move still have plenty of choice.
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