The rental market – February 2020
- An Appraisal of current trends in the ‘Rental’ sector:
It will come as no surprise to Landlords that the market is continuing to see demand soar for rental properties throughout the UK. Most of our clients have been seeing their properties let within a couple of weeks of coming to the market at most, with voids between tenancies minimal.
And this has remained the case during the first few weeks of the year when demand is usually slower. This year we have been busier than we would expect with demand so high, severe shortages of properties remain a major issue, not just for us but for all letting agents in the UK. Of course there are several reasons for this, not just the high demand from overseas professionals who continue to move into the UK (and this shows no signs of slowing down despite ongoing Brexit negotiations), but also as a result of some landlords exiting the market due to unfavourable tax changes, leading to fewer rental properties available .
While we cannot deny that tax changes have presented challenges to buy to let investors recently, the incredibly strong rental demand means that landlords are focusing on other priorities in order to maintain their rental yields. For some time landlords have been investing in residential developments where sales prices are lower yet rental demand is still high, enabling them to achieve good rental yields. Generally tenants are keen to live in these new developments and seem to be happy to exchange a slightly longer commute for a more affordable rent – so areas and developments which offer landlords good value, are usually also popular with renters for the same reasons.
Another advantage of the current market is that, with demand so high, void properties between tenancies are minimal, just days in many cases, helping to boost yields. And of course many renters are choosing to renew their existing tenancies and this too benefits both landlords and tenants, minimising costs and hassle for both.