Research by estate and lettings agent, Barrows and Forrester, reveals that the UK rental market has taken a step backwards due to Omicron, as rental demand has declined in the vast majority of major UK cities during the final quarter of last year.
The Barrows and Forrester Rental Demand Index monitors rental listings across the nation, taking an average demand score for each major city based on where has the highest number of properties already let as a percentage of all rental listings.
The analysis of 23 major UK cities found that rental demand averaged 27.6% during the fourth quarter of 2021, a -15.3% decline compared to Q3, with the market largely returning to the same state seen in Q4 2020 with just a 0.4% increase annually.
Quarterly Slump
The most significant declines are being reported in Cardiff (-44.9%), Bristol (-39.8%), Bournemouth (-29.9%), Newport (-24.5%), and Portsmouth (-20.8%). With Newport (-24.5%), Portsmouth (-20.8%) and Swansea (-19%).
The only major UK city to avoid a quarterly decline in rental demand is Belfast where rental demand has remained flat quarter to quarter. London has also remained largely flat down by -0.1%
Other UK cities to see manageable declines are Liverpool (-5.3%), Aberdeen (-5.7%), Leicester (-6.1%), Newcastle (-7.6%), Cambridge (-8.1%), Plymouth (-10.8%), Manchester (-10.9%), and Sheffield (-11.2%).
Annual Uplift
Despite widespread declines in rental demand during the last quarter of the year, the annual change picture is marginally more promising. On average, the UK’s major cities have seen a 0.4% increase in rental demand placing the market largely back where it was at the end of 2020.
This average, however, is being bolstered by particularly strong performances in Cambridge, where demand is up 30.5% on the year; Edinburgh, up 15.1%; and Manchester, up 12.3%.
Demand increases have also been seen in Newcastle (9%), Glasgow (6.4%), Sheffield (5.4%), London (4.4%), Aberdeen (3.5%), Swansea (1.1%), Cardiff (0.9%), and Oxford (0.2%).
All other cities have experienced an annual decline, nowhere more so than Newport (-19%), Belfast (-17.8%), Bournemouth (-8.5%), Portsmouth (-8.4%), and Plymouth (8.4%).
Managing Director of Barrows and Forrester, James Forrester, commented:
“Just as the UK rental market was starting to find its feet after a very difficult period, the pandemic is once again causing dark clouds of uncertainty to gather and we find ourselves back where we were at the end of 2020.
We saw the detrimental impact workplace restrictions has had on city rental demand during the initial Covid-19 outbreak and so this is no doubt a contributing factor with the spread of the Omicron variant.
There is, of course, a seasonal element to this decline and so there is a very good chance that now the festive period has ended demand will start to lift once again and with the Government’s ambitious booster jab rollout, we should hopefully return to normality at a far quicker pace this time around.”
