Belvoir Rental Report gives key insights into lettings industry
For several years now, The Belvoir Group have been releasing detailed annual analyses using data supplied by its network. This year’s edition, Rental Pandemic Report 2020-2021, focuses specifically on the impact of the covid-19 pandemic, together with other regional concerns.
Some of the significant takeaways are:
What happened to rents during the pandemic?
According to our data, rents across the UK (for all Belvoir offices, including new ones) in 2019 averaged £818 per month, in 2020 they averaged £810 and in 2021 to date, they are £815. So, we did see a dip in rents during the pandemic ‘on average’, however, this has been reversed so far in 2021.
On a regional basis though, the picture is very varied, not just due to the area, but also depending on whether the let was a flat, house or an HMO with room rents, the experience of landlords and tenants throughout the pandemic will have felt very different.
Our quarterly reports show that in most areas, during the pandemic, most: 1. Flats saw rent falls or no change 2. Houses saw rent rises 3. Room rents stabilised or fell.
Did void periods increase or decrease during the pandemic?
Overall, there hasn’t been that much change in void periods, despite the lockdown. There was a small increase in three of those properties taking up to a week to let, but this fell fairly dramatically. Interestingly, Q2 shows the biggest change where void periods for up to two weeks dominate the lettings market, while those taking more than two weeks have reduced dramatically.
Have tenants struggled or managed to cope with still paying their rent?
Belvoir reference their tenants extraordinarily carefully, so rent arrears are few and far between and this, together with low numbers of evictions, are a key reason for using a qualified agency with local experts and the support of a Central Office.
Pre the first pandemic lockdown, most offices had either none or no more than three tenants more than one week in arrears. Although this definitely jumped during the pandemic, this trend had already started in Q1 2020 where most offices were dealing with 4-10 tenants in rent arrears.
This trend continued through to Q1 this year and what we are seeing in Quarter 2 21 is that the previous trends of less than three – or none at all – suggests this was just a ‘blip’ throughout the pandemic period.
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Landmark Group shines a light on the need for real estate proptech
The forward-thinking Landmark Group, under which the Landmark Estate Agent Services operate, has come forward with a wealth of insight following its research of a control group of a hundred agents. As a proptech analyst, investor, mentor and influencer, reading the report has filled me with a high level of optimism for the future of proptech in the real estate space.
It would seem that the analogue estate agent (I was one for thirty plus years) are now past the tipping point of digital transformation, having seen the need to partner with new technologies as they move forward.
However, the bigger challenge might be to choose which horse to get on, to get them to the winning post first.
In the preamble to the survey, orchestrated by Ben Robinson, MD of Landmark Information Group and a veteran in the vertical, stated that the objective was: “To capture the current sentiment in the estate agency industry, (so) we commissioned an independent market research project, which interviewed 100 estate agents located in England, Wales and Scotland.
The aim was to consider not only what impact the pandemic has had on their business, but to also understand more about technology adoption, risk management procedures, and future concerns. We also asked questions to better understand what the estate agency of the future will look like.”
Some of the key points found were:
PropTech: The value of technology and its role in enabling estate agents with the ability to continue delivering a seamless service to customers really shone through to a majority.
78% agreed that working from home made them appreciate the importance of software and technology in the industry.
However, investment in new technology has been impacted. Just under half (49%) said there has been a lack of PropTech investment at their firm during the pandemic.
Processes: The threat from money laundering or associated cybercrimes is a risk that all property professionals are acutely aware of, therefore making sure your agency is equipped with the latest information and checks to appropriately manage risks and stay one step ahead is vital.
Almost half of estate agents (48%) confirmed that they have found it challenging to keep up to date with the latest anti-money laundering, financial fraud and cybersecurity updates amid the pandemic.
We (LIG) asked agents how will the process of buying and selling properties have changed by 2025. (The response). Agents see a more seamless, tech-led process where buyers will have greater access to information earlier in the process and more automation:
Data, Data, Everywhere: 83% think more due diligence and data insights upfront will mean buyers can make better informed decisions earlier, and receive no surprises later in the legal conveyancing process.
Paper Processes Binned: 77% of estate agents believe that agents will be operating ‘paperless’, with all activities managed electronically or online.
Evolution of the Negotiator: 72% say it is likely that negotiators will spend less time ‘chasing’ sales updates due to an increased use of online end-user platforms.
Andrew Stanton is the founder of Proptech-PR, a consultancy for Founders of Proptechs looking to grow and exit, using his influence from decades of industry experience. Separately he is a consultant to some of the biggest names in global real estate, advising on sales and acquisitions, market positioning, and operations. He is also the founder of Proptech-X Proptech & Property News, where his insights, connections and detailed analysis and commentary on proptech and real estate are second to none.