COVID-19 Cools The Short Term Rental Market, But . . .

The huge ferris wheel that dominates portions of the london skyline frames big ben in the background
DSC_0092.jpg photo by Mike Procario is licensed under CC BY-ND 2.0
Tourist London is suffering from COVID-19, including its hospitality landlords. Tenants have more seats on the ferris wheel, but the landlord decides when it's time to get off.

Hamptons, a real estate company in the UK, reports that landlords there are switching from short- to long-term rentals. There is good news and bad news in this story.

The good news: The amount of long term rental stock is going up

In the years leading up to COVID-19, landlords moved existing rental stock from the long- to the short-term rental market, which drove down vacancies and drove up rents in the long-term rental market. Enter the pandemic: revenues in the short term rental market have dropped. Landlords still need revenue, and some landlords are switching from short-term rentals to long-term ones. This is especially the case in London, where the switch is greatest. Hamptons also reports that the rent levels are well below the short-term rental levels. The average drop in rents in London is just shy of £2,000 per month.

The sort of good news: long term rents are holding steady

Compared to last year, average rents across the country are holding steady overall, with some areas (notably London) reporting a drop, and some (notably the Southwest) rising. For the 1.1 million households waiting for social housing, the average rent of £1,000/month across the UK isn’t good news at all.

The bad news: tenants renting in England have no security of tenure

Landlords can still evict tenants for no reason at any time. When/should the market in short-term rentals rebound/s, the tenants could lose their housing even while they have paid rent and met all of the tenancy requirements.

Read more about the private rental market at Hamptons International: Short lets drive up London rental market stock as rents continue to fall