Tenants are feeling the squeeze as new rents outside of London have hit a new record high of £1,231 – that’s 33% or £300 more than pre-pandemic 2019. Renters in London are now forking out £2,567 for a new tenancy with rents 28% or £559 higher than in 2019.
Data from Rightmove also reveals that rent growth is beginning to slow down but it’s still near to ‘double-digit territory’.But despite the rising costs, the property platform says that landlords are deluged with tenant applications for rented homes.
The firm’s report says that ‘many landlords are still being met with long queues of prospective tenants wanting to view and rent their property’.
It says that the time to find a new tenant is just 17 days – the quickest since November last year.
Number of available properties to rent continues to improve Tim Bannister, Rightmove’s director of property science, said: “The number of available properties to rent continues to improve compared to last year’s record low levels providing tenants with more choice, though with a long way to go to catch up with pre-pandemic levels of stock.
“There will continue to be more tenants looking to move than properties for them to move to for a while yet.”
He added: “Average asking rents for new tenants have risen at a rapid pace since the pandemic reflecting the significant increase in demand, which is driven by a combination of factors including changed housing needs, such as some space to work from home.
“Landlords are currently having to navigate a multitude of challenges, but the data suggests it remains important to build long-term relationships with good tenants, with the majority of tenants choosing to stay in their property for longer than two years.”
Homes up for rent has grown by 7%
The figures show that the number of homes that are up for rent has grown by 7%, compared with last year, and tenant demand has risen by 3% too.
And while some landlords decide to sell up because of ‘multiple market challenges’, many others are determined to keep hold of good tenants.
Rightmove has also monitored landlord feelings and 47% are worried about the government’s sentiment towards the sector.
Plus, 41% are concerned about higher taxes, and 33% are worried about increasing compliance requirements.
Properties up for sale that had previously been rented
Rightmove also says that 16% of properties that are up for sale had previously been rented – that’s up from 13% in January 2019.
And most landlords (57%) say their tenants are choosing to stay in their properties for longer than 24 months.
The national lettings managing director of Leaders Romans Group, Allison Thompson, said: “The themes dominating the lettings market continue to be low supply and high demand – an expansion in the number of people looking to rent, rather than landlords selling up en mass.
“Some highly leveraged landlords are considering selling due to interest rate rises but we find most are mortgage-free, and in most cases our advice is to avoid a knee-jerk reaction.
“Interest rate rises are likely to reverse in early 2024 and in the meantime the almost total absence of voids helps counter increased mortgage costs.”
Source Rightmove, Property 118