Rental businesses are known for being one of the most lucrative industries that have been raking in billions of British pounds in the last few years. In fact, the last two decades have seen the rental industry growing substantially. On an annual basis, they would earn up to 31 billion British pounds during the turn of the millennium. In total, the industry has made over 86.5 billion pounds by 2018. This makes the rental industry in the United Kingdom, one of the most lucrative business models that don’t necessarily need a good amount of maintenance and energy.
However, this year has started unlike any other, and several different industries from around the world will need to make changes to their business models if they want to continue operating. The rental industry is no different from other industries.
Most people might think that multi-billion dollar industries aren’t necessarily impacted by the pandemic as much as small businesses.
While this might be true in some way or form, a lot of multi-billion industries have been laying off workers since they have lost billions internationally. This is especially true for the airline industry that has lost $314 Billion US Dollar from ticket sales alone. It’s quite apparent that a lot of industries that have been heavily relying on foot traffic and sales are taking a major hit from the pandemic.
If corporate giants and multi-billion industries that have been making hundreds of dollars in revenue are starting to get a major hit in sales, surely the rental industry will also be affected. But how is the rental industry doing during the pandemic? What are the deciding factors that could affect the future of the industry? We’ll be answering some hard-hitting questions that will determine much of how the industry will be bouncing back from a pandemic.
How Has the Industry Been Faring?
But before anything else, we’ll need to address the largest elephant in the room: how has the rental industry and its market been holding up in the middle of the COVID-19 lockdown?
Well, much of the country’s market when it comes to rental has been slowly diverging towards other concerns, especially with the number of homes that catered towards affluent owners increasing in let fees as most activities in other neighborhoods have been dropping.
In certain studies, the UK’s wealthiest neighborhoods account for 10% of the population, with the number taking a drop by 1.3% in the last year. However, there is a rise in new instructions by around 4%. In contrast to these, the number of homes for let was down by around 14.8%.
Still, most experts would suggest finding a high-quality home in affluent areas, especially when prices have been dropping for the past few months. Fortunately, there are letting agents that can help you find the right home while being attentive to your needs and preferences.
The fall in much of the activity is attributed to the reduction of individuals finding new job positions as there’s a spicy inredundancies and unemployment. With the number of tenants that are not financially capable of signing in new contracts, most landlords are forced to lower some of the rental fees to ensure that tenants will still stay.
Ultimately, most experts would say that much of the economic and public health crisis has widened the gap in the rental market, especially when families that are working to sustain their families have been hit in their income source.
Certain studies that are conducted by the National Residential Landlords Association have found that 66% of their members will be affected by the pandemic, no matter what their decisions will be. 48% of the members believe that they aren’t really affected, while around 18% to 20% would say that the crisis has made a significant impact on their business. To conclude, the rental industry has been negatively affected by the pandemic, and much of the detrimental numbers are still on the rise.
Conclusion
Overall, there is a multitude of different factors that will affect the real estate and the rental industry in the United Kingdom and other countries around the world. With more cases steadily rising, it’s highly unlikely that the recovery process will start any time soon. However, the future is still not yet set in motion, and we can do our part in supporting businesses.
It’s important to note that we are far from the end of this global health crisis, and there’s bound to be even more industries that have been affected. Slowly but surely, the rental industry in the UK and across the world will start getting back on its feet. Still, we are living in uncertain times, and almost any event could disrupt the flow and operations of most businesses.
The best that we can do as consumers are by supporting different industries and by abiding by the laws of authorities. By helping each other, we can effectively keep cases of COVID-19 down so that the economy can start recovering.
