Annual growth in rental values continues to increase in the traditionally busy summer months, with little sign of an imminent slowdown.
This is according to Nicky Stevenson, managing director of Fine & Country, who adds that as a result, affordability remains stretched, with renters expanding their search areas.
“In the prime market, average rents have risen 11 per cent year-on-year. The North East and South East are the only regions where the average price of a prime monthly rental is lower year-on-year.
“According to Rightmove, demand per rental property is 162 per cent above May 2019 levels, leading to fierce competition and more than a quarter of properties being let above the listing price” Stevenson comments.
“Zoopla report that with rents having risen faster than average earnings for the last 21 months, affordability is tight. According to the ONS Opinions and Lifestyle Survey, 15 per cent of renters say it is very difficult to pay their rent, a jump from 10 per cent in November last year.
“As a result, renters are being forced to change their search behaviour, with Rightmove reporting a 50 km2 increase in rental search areas.”
Stevenson notes that the supply demand imbalance remains: “Despite the supply of homes for rent being unlikely to significantly improve in the near term, a slowdown in the sales market may help. Fewer landlord sales and owners renting out homes as they wait for any price falls to pass could marginally boost rental stock. Although a steady stream of landlords are indeed leaving the sector, Zoopla report that this has been the case since 2018, and the trend is not accelerating.”
“The rental sector remains strong as a medium-to-long-term investment, with more than one in four landlords with over five properties planning to expand their portfolio over the next year. According to the Royal Institution of Chartered Surveyors, rental growth of 6% per annum is predicted over the next five years” Stevenson concludes.
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Why did Government make Private Property unaffordable adding thousands of pounds cost to every Rented Property to fill their own pockets while pretending to be Tenants friend.
And why do they continue with policies that make the situation even worse?
Lloyds bank (and other big business) to the rescue….
The LHA, doesn't even cover the rent payments for most tenant's on UC in their local borough.
Makes me wonder how the government will force LL's to accept tenant's on UC, making it illegal to discriminate against a system that discriminates against LL's.
All that will happen is benefit claimants will have false hope, as landlords won't be able to discourage them from applying, but they will inevitably fail affordability testing. For clarity I now state in adverts that applicants will need to demonstrate they can afford the rent, and that the calculation used is 30 times the monthly rent. So at £1000 pcm rent the household income needs to be at least £30,000. This is also the figure letting agents use locally.
I was u der impression that many landlords were exiting the market. So the figs re LL increasing their portfolio is a bit questionable.
Smoke 💨 & mirrors 🪞, if we were increasing our portfolio’s then why are rents going into the stratosphere, and why for the first time ever am I getting contacted by agents I have used in the past, saying they are desperate for rental properties 🤔🤔. We all know the truth.
We have all seen agents trying to send message that landlords are buying and RRB /S21 is not a problem - probably because they want to stop the exodus of their clients and the drastic reduction in number of properties they manage
LL's are actually exiting the market and they will continue to do so, with all the new laws, regs and legislation the government is implemented.
Simple commonsense, is not common in the House of commons where LL's are concerned.
Rents have sky rocketed, and they've not figured out the reason why yet!
As a LL, my business model, like most LL's is to deal direct with the tenant.
I'm not interested in dealing with 3rd parties to collect my rent each month.
When there's an issue of non-payment of rent for 2 to 3 months, I don't want to hear the 3rd party telling me that they can't provide me with any further info due to data protection and their's nothing they can do with my rent arrears.
Hence the reason why most LL's don't want anything to do with tenant's on benefits, UC etc etc.
It's a huge liability and extremely high risk, with no support network for LL's.
Lewisham council offer £4,500 to LL's for taking tenant's on UC for 2 yrs minimum contract, which means life!
It'll be better for the council to give the LL's £3,500 instead of £4,500 and then £1,000 for the tenant's to go on a basic tenant's fundamental accredited course on understanding the requirements of a tenant and the contracts they sign.
How can I even concider doing any form of business with people that cannot afford to pay me?
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