Estate agent ‘shocked’ by rising rents during pandemic - academic warns of potential ‘market shocks’

A Belfast estate agent says she is “quite shocked” at the level of rents she is now getting, with one academic saying they have risen by 2.9% across Northern Ireland in the wake of the pandemic.

By Philip Bradfield
Friday, 19th February 2021, 6:30 am

The reports come after the News Letter heard of prospective tenants queuing to view rental properties in the Lisburn area amid a shortage of properties.

Yesterday the Department of Communities said it was extending legislation protecting private renters from eviction during the pandemic.

Mark McAlpine, who runs his own estate agency in Lisburn, told the News Letter that rents in the Lisburn and Hillsborough area have risen by 10-15% in the past year.

Rents have been increasing across NI during the pandemic

“I can’t get enough properties to meet demand,” he said. “Previously it would have been common to have two A4 pages of listings but currently this has dropped to two properties. For every property that comes on the books I immediately know four or five people who will want to view it.”

Terraced properties are currently renting for between £450 to £600 in the area. 

He has recently seen NI natives returning from Scotland, Germany and France. “They are finding property is cheaper to buy in Northern Ireland plus they can still keep the same job they were doing by working remotely.”

He is also finding young people are much more content to rent than previously as they find difficulty raising money for a deposit to buy and do not want to commit to a major loan.

Naoimh Leonard, lettings Manager with Reeds Rains estate agents in Belfast sees a similar trend. 

“There is definitely more demand for property this lockdown,” she told the News Letter. “I am quite shocked at the level of rent I am getting. In east Belfast rental properties are not lying vacant for long and maximum rents are being reached.”

Before lockdown mid-terraces would have rented for around £575 but now the same properties are going for £650 to £675, she said.

“Rent and demand are going up from what I can see.”

All seven branches of the estate agency across NI are getting “quite a large number” of new rental properties on their books.

There is also a spike in sales of city centre apartments.

“Investors are selling apartments because demand for them is going down.”

Previous demand for apartments came in large part from executives of major corporations. However demand for them has dropped as there are no restaurants or bars open in the city centre and the same executives now prefer garden space. They can also do the same work from a larger property with a garden further away from the centre, she said.

Mark McIlvenny from Reeds Rains in Newtownabbey says rents have increased “dramatically” since June.

“This time last year we were maybe getting four or five enquiries for a property whereas now we are getting around 15 to 20,” he said.

He believes the demand is partly due to people moving out of apartments and wanting to work from home in a larger property with a garden.

“There is no single reason for it. I believe it to be largely due to the fact we are spending a lot more time in our home therefore people wanting the best possible property for what they can afford.”

Dr John McCord, a Lecturer in the School of Law at Ulster University, said average rents across NI are “accelerating” by 2.9% in the wake of the pandemic to £643 per month.

The Rental Performance Index shows a drop in the number of rental properties at the regional and local level, he said. This is due to welfare reform, regulatory and taxation changes, longer lease terms and limited stock availability.

The number of rental transactions dropped considerably in the second half of 2020 and into 2021, but “pent up demand” has now “surged market activity” he said.

There is some evidence that some landlords are selling up to raise cash after a general rise in property values, or due to their own financial pressures - some of which relate to rental arrears from tenants, he said.

 Overall, increasing rents, rising unemployment and reduced household income point to “potential warnings” of rents that are too high to afford and potential “market shocks”.

Further risks will come from the end of government furlough schemes, increasing unemployment and general movement “deeper into a recessionary environment”.

He added: “This may impact on appetite to be a landlord and the ability of the renter to pay and fundamentally on the availability of private rental stock.”

Meanwhile, Communities Minister Deirdre Hargey has announced that due to the ongoing pandemic she is extending the legislation protecting private renters from eviction to 30 September 2021.

Minister Hargey said: “I am committed to protecting people from eviction during this difficult time. My focus in all I do is to support those in most need. I introduced this legislation to do just that and to support the wider public health effort.”

She added that Housing Rights can provide specialist advice to tenants and landlords to help resolve disputes and save matters going to court.

Housing Rights can be contacted online at www.housingadviceni.org/coronavirus or by calling 028 9024 5640.

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