Rent rises expected due to high demand
The numbers of people searching for a home to rent in Britain is significantly higher than the rental supply available, a new study shows.
Research from Propertymark shows that there were 34 prospective tenants signed up per member branch, rising by 31 per cent from December 2016 and 10 per cent year-on-year.
The number of rental properties letting agents managed rose in January from 188 in December to 193 per branch, indicating a rise of three per cent. In January 2016, there were 12 per cent less and 173 properties were managed per branch.
David Cox, ARLA Propertymark chief executive, said: “As expected, the New Year brought with it a flurry of activity in the rental market. While supply of rental stock rose slightly, the number of prospective tenants increased by a much bigger margin.”
Mr Cox went on to say that, in times when supply and demand are off-balance, the market is not fair for tenants and rent prices increase.
He added that an outright ban on letting agent fees will cause the situation to worsen for renters, as the money will need to be picked up through other means such increased prices.
The new landlords’ tax will also have a negative impact, while expected changes to mortgage interest release will have a massive effect on costs, Mr Cox stressed.
He surmised that the “rental market is far from reaching equilibrium”.
The figures could suggest more properties being built across the UK in order to try to satisfy the ever-increasing demand, while the expensive nature of renting could mean more people consider saving for a mortgage earlier. This approach could potentially save more money in the long run.
However, not everyone is ready to commit to a mortgage and it is vital for young families in particular to find value in their property. Three or four-bedroom homes for rent are often expensive, particularly in cities. Exploring the market will be vital to find the best possible value.