There is no real prospect of improved rental supply in the near term as private landlords continue to sell off homes due to tax and regulatory changes.
That's the message from Zoopla, which says that sell off - combined with renters renewing their tenancies - will “amplify the fierce supply squeeze and keep upward pressure on rents into 2023.”
This view is explained in more detail by Richard Donnell, Zoopla’s executive director, who says: “What the rental market needs to combat these challenges is more new homes for rent.
“Greater regulation has seen less new investment and a small but growing number of landlords selling up, meaning the rental market has stopped growing since 2016.
“There is a risk that more regulation to improve standards or potential new measures to dampen rental growth, as proposed in Scotland, may compound the supply problem which is pushing rents up in the first place. Policymakers need to tread a careful path between protecting consumers and ensuring a decent supply of homes for rent.”
Donnell’s comments accompany startling figures from the portal.
These show that the average rent in the UK has increased by £115 per month since last year, reaching £1,051 per calendar month according to Zoopla.
A tenant now pays 34.4 per cent of the average income of a single earner.
The portal, in its latest lettings sector market snapshot, says rental growth has accelerated over the last 12 months - from less than two per cent in July 2021 to 12.3 per cent today.
There are early signs of a market plateauing - one such sign is a there has been a jump in demand for one and two-bed flats as renters feel the cost of living squeeze and fewer look for two and three-bed houses.
In the North West, Wales and London, the average rent for a two-bed flat is now more expensive than the average rent for a three-bed house.
With memories of the pandemic receding, rental growth in urban markets (at 10.5 per cent) is now outpacing that in rural markets (8.5 per cent) as strong employment growth drives demand in cities, reversing the trend seen during recent years.
The strongest performing urban markets are London (17.8 per cent); Manchester (15.5 per cent); Glasgow (14.4 per cent); and Bristol (12.9 per cent); whilst the North East is one of the most affordable areas in the UK to rent.
Zoopla says renters renewing their tenancies will also amplify the fierce supply squeeze and keep upward pressure on rents into 2023.
There is headroom for some renters to pay more, especially outside London and the South East, however overall, the portal says it expects the headline rental growth to slowly taper over Q4 and into 2023.
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They forgot to mention Digital Tax another reason for many traditional LL’s are getting out, they are required to do what they cannot do, you can bring the horse but can’t make him drink. Only armchair Technology Landlords required.
I signed up for one of the landlord specific MTD ready packages about 3 months ago and it is incredibly time consuming. It's very clever in theory but very confusing to use. Expenses keep getting duplicated, I can't work out how to deal with accounting for refunds of deposits on joint tenancies where each tenant has paid a share of it. Utility bill and insurance receipts simply don't reconcile. They have numerous pages of instructions and multiple training videos but finding what you want and then understanding it is a very lengthy process. They usually respond to email queries within a few hours but I've usually wasted hours struggling before I try the email route.
The phone app seems to be very limited in what it can do so most of it can only be done on a PC or laptop.
Overall so far it seems much slower than using a selection of spreadsheets.
I'm dreading this Digital Tax, I'm of a generation who don't understand all this Digital business, there's going to be a lot of mistakes
I’m with Jo and Andrew. I’ve wasted hours, days, weeks even struggling through the endless complexities of so-called ‘landlord specific’ software. It is hellish, with endless delays, lack of basic functionality that a landlord might need, attributes its own codes and accounting so nobody knows what an item is… ridiculous. I’m continuing with excel and will seek any conversion software when the time comes. I might yet hire a professional bookkeeper if it becomes strictly necessary but I’d rather do it myself and know where everything is.
I've been recommended to try 'Hammock' supposedly set by landlords for landlords, has anyone on here tried them ? thought I might give them a try 23/24 while still using the old pen and paper method as a back up ready for 24/25 'making tax digital
The constant changes in Taxation and rules of Government and Councils is showing that LLs have had enough and are leaving in there droves.
A massive issue waits down the line for both the Government and Councils as they are nowhere near building enough social housing to cope with the demand when the Private Rental Landlords are gone.
Lots more use of B&Bs and cheaper end hotels will become the norm as properties that LLs are selling are more to private buyers and not back to LLS.
".........cheaper end hotels......"
That's because high end hotels are full of illegal immigrants!
Also, it has been said (non-British) UN forces are being housed in hotels in preparation for supposed upcoming civil unrest in which British soldiers would not be deployed against its own peoples...no idea on the authenticity of this information.
They'll use the epc c rating to compulsory purchase properties
Then they'll demolish them and build back better ....
Except they won't be better , they'll be a LOT worse
An article stating what we, as landlords, already know…. The public are starting to see this, but I fear it will make no difference to policy, so for now my decision to sell up still stands.
They can't say they weren't warned!
So if Jo, says its incredibly difficult, one of the most knowledgeable landlords on here for sure, what chance have the rest of us got.
So its nothing to do with providing quality affordable housing but everything to do with destroying private housing sector by every means.
I agree they are destroying it, but I am not so sure by design, more so blind incompetent policy… either way the tenants of the future are up the creek with not even a sniff of a paddle 🛶
My wife is a computer wizz who can do absolutely anything on a screen. She tried multiple software trials with me and gave up on all of them. Even their own staff often couldn’t explain how some of the basics should be dealt with. Spreadsheet so much better for me.
I now have a purchaser on sale #3 - providing it goes through.
It's a shame
I’m a long-term (26 yr) landlord who always swore he’d never raise rent on an existing tenant nor sell anything until dead. I’ve had to renege on both promises now, ENTIRELY due to govt actions.
I'm much the same James, I 've never liked increasing good existing tenants rent, and always kept that to a minimum, far easier to increase the rent when renting to a new tenant, selling ? I don't 'want' to sell anything, but as I'm being pushed further into a corner it's looking more and more likely that I will be selling, some at least
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