The rental market is due to lose 25 per cent of the 1.2 million moves it enjoyed in 2019 this year, Zoopla says.
It expects activity levels to rise after the current lockdown has eased, but only to the levels usually seen in the final half of 2019.
In its latest rental market report, Zoopla shows that there was a 57 per cent drop in demand for rental properties in the two weeks leading to 30 March. This bounced back 30 per cent in the following two weeks.
However, rental demand is currently 42 per cent lower than it was at the start of March, Zoopla adds, and 21 per cent lower on an annual basis.
It says that new rental property listings have dropped only 3 per cent sine 1 March, but the rate of new listing has slowed.
The report adds that for the first time in a year, rental growth in London is behind that in other cities, coming in at 1.7 per cent growth in March, down from 2.3 per cent in February.
The biggest city rise was seen in Nottingham, at 5.9 per cent, and the lowest was in Aberdeen, were growth dipped 2.1 per cent.
Headline rental growth in the 12 months to March stands at 2.4 per cent compared to 1.5 per cent a year ago, with the average rental gaining £23 in a year to stand at £886.
Zoopla head of research Gráinne Gilmore says: “The flexibility of the rental market is one of the key factors which has allowed activity to bounce back more quickly than other parts of the property market.
“The rise in demand in the first two weeks in April indicates that some tenants are already mapping out their next move.
“As with the whole housing market, however, activity levels and rental growth will likely be closely aligned to the economic landscape of the UK once the lockdown eases and the immediate impact of COVID-19 starts to recede.
“Rental growth has increased steadily for the last 3 years as demand has increased in the face of dwindling new supply. However, If the responses to COVID-19 contribute to a rise in unemployment, as some official bodies have forecast, this will reduce the scope for any additional growth in rents. We expect growth to moderate this year, but to remain in positive territory.”
