With demand from tenants gathering pace, at a time when there has been a reduction in the number of new properties for renting, many prospective tenants now face having to bid against each other, pushing rents up in the process, in the latest sign of Britain’s overheated property market.
Various reports suggest that a growing number of letting agents are now turning to open days and ‘sealed bids’ to achieve record rent levels.
The supply-demand imbalance is placing upward pressure on rental values, according to JLL Residential.
The company says that it has seen a 57% increase in applicant registrations and 40% rise in offers made from those looking to rent.
Activity has picked up significantly with competitive bidding now taking place on a number of properties, and rental prices being achieved on some new build developments, for example, reaching 5-10% higher than anticipated.
Lucy Morton, head of residential agency at JLL, said: “It has been an exceptionally busy few months for the lettings teams across all the JLL agency offices, and well-presented properties have let with fewer voids than in recent years.
“The quality of rental stock has increased considerably, with renting no longer considered the second option but the preferred option for many.
“Punitive changes to stamp duty have shaped how people are interacting with the property market, most notably at the higher end. Once upon a time, if you were looking to live in London for two-three years you would automatically look to buy, but now with the cost of stamp duty, along with more stable price growth, you are likely to only break even in this time given the cost of buying a home.”
She added: “An unspoken perk of renting is the ability to ‘Right-Size’, which is an exclusive benefit of renting as opposed to buying.
“Tenants have more flexibility around where and the type of property they rent, so if the ‘shoe doesn’t fit’ you can move easily, allowing young professionals to upsize when they become a young family, or families to downsize when the children leave the nest.”