‘Boomerang tenants’ help landlords rake in the cash
City centre landlords have seen rents surge by more than 10pc as tenants rush from their lockdown boltholes back into flat shares.
Rents in several city centres are now above the pre-pandemic level, according to property website Rightmove, as competition for flats doubled over the past 12 months.
Homes have been snapped up at the quickest rate ever recorded. It took on average just 17 days to let a property, according to Rightmove.
So-called “boomerang tenants”, who left urban flats to move back in with their parents or live in cheaper areas, but have rushed back since restrictions were lifted, have driven a wholesale reversal of the lockdown trend.
Between February 2020 and February 2021, rents in Birmingham city centre fell 5pc, however, last month rents were 10pc above their pre-pandemic level. Similarly, rents in Nottingham city centre initially fell 2pc but are now 11pc higher than February 2020.
The surge in demand has pushed the supply of rental homes to its lowest level in almost a decade, according to rental website SpareRoom.
Of all Britain’s 50 largest towns and cities, London recorded the biggest jump in the ratio of demand to supply between July and September, up 165pc. “Room wanted” adverts now outnumber adverts for available rooms for only the third time in six years.
Matt Hutchinson, of SpareRoom, said: “Huge numbers of people who moved home for lockdown are starting to look for their own places again.”
The new demand has been driven primarily by people moving out of parents’ or friends’ houses during the pandemic, as well as people who now want to flat share after living alone during lockdown.
Rightmove data showed competition for three- and four-bedroom flats was up 124pc and 131pc respectively compared with September 2020.
SpareRoom data showed a quarter of prospective tenants had planned to move out of a parental home, while 10pc were moving from staying with a friend. Students returning to cities now universities have brought back in-person teaching have also been a major factor.
All of these movers are searching without in turn releasing supply to the market, which has triggered a bottleneck.
“Last summer we had record levels of supply in the rental market, alongside demand at an all-time low. Now that’s completely flipped,” Mr Hutchinson added.
