I happened on this song yesterday. They appear to be playing Ukulele chords with a capo on the fifth fret. I do a bit of that myself nowadays, I like the tinkly sound it makes on my steel string guitar. This is a great Ukulele song. The video has had over 370 million views. There is an MP4 KaraUkey version of it on the Videos page.
Passenger - Let Her Go