Newly released data from UK rental guarantor service Housing Hand has highlighted the volatility currently being experienced across the UK’s private rented sector.
The company acts as a rental guarantor for students and working professionals and has seen significant shifts in demand for its services over the period from November 2019 to November 2020.
Demand for rental guarantor services for students was notable for a number of reasons. While there was an overall increase in the number of students that Housing Hand guaranteed over the period, there was a drop-off in international students.
Jeremy Robinson, Group Managing Director, Housing Hand, says:
“The fall in demand from international students aligns with wider data trends across the industry. Between travel restrictions, lockdowns, a shift to online learning and Brexit, international appetite for UK higher education has been impacted significantly.”
“This is why we’re seeing such low occupancy rates in London for purpose-built student accommodation right now.”
“It will be interesting to see the impact that all of this will have on the January intake.”
Student rent strikes across the UK are also feeding into this volatility. However, despite the unrest, Housing Hand recorded a 12% increase in the number of UK students using its service.
The lower grade boundaries offered by universities following the UK’s A Level grading controversy in August 2020 has played a part in this.
It’s also likely that many parents and guardians who are currently on furlough or unemployed are now turning to Housing Hand to secure their properties.
Even those still currently in employment may wish to avoid acting as guarantors themselves, in case that situation suddenly changes.
Nor is it just the student part of the private rented sector that is experiencing shifts in renter patterns. Housing Hand recorded a surprise increase of 8% in the number of international working professionals that it guaranteed between 2019 and 2020, despite the uncertainty surrounding Brexit and the Covid-19 pandemic.
Terry Mason, Group Operations Director, Housing Hand, says:
“The growth in demand for rental guarantor services by working professionals from overseas flies in the face of what we were expecting to see.”
“It highlights the continuing diversity of the UK workforce, despite the wider political, economic and medical situation.”
“During 2021, hopefully this will continue; however, the first three weeks of the year have shown a slow start, so watch this space.”
Even with mass vaccination underway, the impact of the Covid-19 pandemic is likely to be felt across much of the UK’s private rented sector over the course of 2021.
Economic uncertainty means that many of those in the UK are seeking the reassurance that a professional guarantor service provides, rather than the risks associated with a parental guarantor.
“From a landlord’s perspective, rental guarantor services mitigate the increased risk that is now associated with parental guarantors.”
“Just as many renters may be facing personal economic uncertainty, so too are their parents.”
“This is why professional guarantor solutions are so prized by landlords and letting agents right now”, concludes Terry.