Our quarterly Rental Market Report highlights the UK cities where rents continue to increase - and the places where rental growth has slowed.
This decline in renters looking to move has since bottomed out, and demand rose by 30% in the two weeks to 14 April 2020.
The cost of renting a home has increased annually to March 2020 by 3.1% in Wales, 2.0% in Northern Ireland, 2.3% in England and 3.5% in Scotland.
Where are rents rising and falling in the UK?
The increase in the cost of renting across English regions range from +1.4% in the West Midlands to +3.8% in the East Midlands.
Only the North West and London have seen a small fall in rents, compared to the previous three months.
Nottingham continues to have the highest rental growth, showing an annual rise in rents of 5.9%.
People renting in Aberdeen saw rents drop by 2.9% in the first three months of 2020, compared to the last three month of 2019. The city's rental market has been affected by the 2015 collapse in oil prices.
Rent increases in London have flattened with 1.7% annual growth, down from 2.3% in February.
This may reflect a slight easing in rental demand, after some renters bought homes following the post-election bounce.
While a lack of supply and slower new investment has supported the increase in rent in the capital over the last two years, a sustained supply of new build schemes is likely to increase choice for renters and keep rental growth in check.
Are there still homes available to rent?
The total number of homes available to rent remains broadly unchanged. There has been no large-scale withdrawal of homes listed to let since the start of the coronavirus lockdown. Rental listings are down just 3% compared to 1 March 2020.
But the rate of new rental listings coming to the market has slowed, after a surge in homes to rent before the lockdown as landlords in some cities moved short-let homes to the long-let market.
What can we expect for the rest of 2020?
Once the lockdown restrictions ease, activity in the rental market is likely to rise, due to pent-up demand.
This would mean that total moves within the rental sector in 2020 would be around 25% lower than in 2019.
With annual UK rental growth - the increase in rental market rates - at 2.4%, up from 1.5% in March 2019, rental growth for the rest of the year is expected to remain moderately positive for landlords.
"The flexibility of the rental market is one of the key factors which has allowed activity to bounce back more quickly than other parts of the property market. The rise in demand in the first two weeks in April indicates that some tenants are already mapping out their next move.
"As with the whole housing market however, activity levels and rental growth will likely be closely aligned to the economic landscape of the UK once the lockdown eases and the immediate impact of coronavirus starts to recede.
"Rental growth has increased steadily for the last three years as demand has increased in the face of dwindling new supply. But, if the responses to COVID-19 contribute to a rise in unemployment, as some official bodies have forecast, this will reduce the scope for any additional growth in rents. We expect growth to moderate this year, but to remain in positive territory."
Top 3 takeaways
1. The cost of renting continued to rise fastest in Nottingham with an annual increase of 5.9%
2. People renting in Aberdeen saw rents drop by 2.9%
3. With annual UK rental growth at 2.4%, up from 1.5% in March 2019, rental growth for the rest of the year is expected to remain moderately positive for landlords
You may also be interested in...
- Demand for homes to rent increases by 30%
- Our previous rental market report: cost of renting hits three-year high
- Coronavirus: moving back in with parents during lockdown