This has been a year unlike any other. With the fallout of COVID-19 still having an impact, plus the uncertainty around Brexit, there has been a lot of upheaval for businesses across all sectors and industries in the last 12 months.
One sector that’s had to make some adjustments in recent months is housing. House moves were postponed at the start of lockdown and allowed once again in England back in May. Since then, the market has picked up.
However, while 80% of letting professionals who responded to a recent survey for Goodlord claim that they feel positive about the future of the letting industry, almost half (47%) say that the impact of the pandemic is still their biggest concern.
With this in mind, it seems that there are some challenges that the letting industry faces right now. Here’s a look at what these are.
Lockdown and what happens next
This is a major concern across the board. At the height of lockdown, letting agencies had to deal with hold-ups that came about as a result of the restrictions. Viewings, surveys, and conveyancing all had to be approached in a different way, with these essential parts of the letting process going online, and this slowed the rental process down.
We eased out of lockdown in the summer and this saw an increase in the number of prospective tenants. In fact, when letting agents reopened, it was thought that this surge in demand was the result of lockdown break-ups and job losses.
But now, as the number of local lockdowns increases, there is a chance that the logistical issues we saw earlier in the year will return. This could mean that rentals slow down again for a period. The picture changes daily, making it difficult for letting agents to plan beyond what the current restrictions allow.
Tenants have had a tough time
Unemployment figures have soared as a result of the novel coronavirus. For those who have been renting a property during this time, there is the chance that they are facing redundancy or unemployment and this, in turn, has impacted on how they will cover the rent.
For those that are still employed but live in flats with no access to outdoor space, there’s a chance that they have realised during lockdown that they want to move elsewhere so they have access to the outdoors. This could signal a time where those flats without outdoor areas are suddenly becoming empty as tenants move on.
Additionally, as more tenants have had time within their rental over the last few months, they will have noticed more issues around the property. This could mean that letting agents are dealing with a surge in calls about needing to repair leaky taps and electrical equipment.
Landlords are experiencing financial issues
With many tenants being made redundant or losing their job as a result of the pandemic, they have struggled to cover the rent. This, in turn, has had a knock-on effect on landlords.
These landlords may usually use the rent to cover the mortgage payments on their buy-to-let properties and now that income is no longer coming in. Also, landlords have found they don’t know how to support their tenants through this period.
This is a major challenge for letting agents as they have to encourage communication between the landlords and their tenants in order to keep the properties on their books. There are many conversations that will have taken place in recent months, but if we go back into a national lockdown, the landlords that made it through the first lot of restrictions might find they need to protect their properties during a second lockdown.
For letting agents, it’s worth having letting and estate agent insurance in this instance. If landlords are unhappy with the service or advice they have received from the agent, they might want to make a legal claim. Cover, such as the type offered by Gallagher, is designed to protect letting agents in the event of proceedings that take place.
As there are still many questions around what happens next, letting agencies across the UK ought to ready themselves for anything that comes next.