The UK’s political and economic climate has been somewhat of a rollercoaster over the past month, but I’m pleased to report the rental market is proving to be much more stable and shows little sign of derailing.
We had a very successful summer with a huge number of enquiries from tenants across the board. There was, and continues to be, an exceptionally strong demand from overseas students and also from families looking for houses and large flats.
Rents increased by 3.3% in the three months to October, the fourth successive quarter where growth has exceeded 3%. Supply levels of properties available to rent remain at a record low. This underpins the strong rental growth and the continued shortage of properties has led to huge competition amongst tenants with properties often being let at above asking price even before they reach the market.
In the short term the cost-of-living pressure is beginning to show, however we expect the current property shortage to continue to fuel rental growth, albeit at a more modest rate. Whilst there is usually a natural waning of demand in the months leading to Christmas, we are yet to see any signs of the seasonal slowing down. As mentioned in my previous market comment, now continues to be the perfect time to let your property, so please don’t hesitate to contact us for a free rental valuation.
Over the medium term, it is predicted that higher interest rates will lead to a slowing of the sales market resulting in stock shifting to rentals bringing in many more first-time Landlords. However, the same high interest rates will put increased financial pressure on mortgaged buy-to-let Landlords, which is likely to mean levels of available stock remain constrained for some time to come.
In legislative news, despite the U-turn on many policies, it has been announced that the Renters Reform Bill will continue to go ahead. Scheduled for mid-2023, the bill is part of the government’s ‘commitment to a fairer private rental sector’ (the less said the better on that!) Whilst there is much talk of the abolishment of the Section 21 Notice, we expect the grounds for eviction to be strengthened and made easier for Landlords under Section 8, so Landlords should certainly not be put off from renting their property.
Here at Plaza Estates, we pride ourselves on making the process simple and ensure we keep up to date on all legislation changes. We will make sure that we talk you through any updates when they are brought in ensuring you’re fully protected and in the loop.
Do please get in touch if we can help you in any way, we are happy to give general ad hoc advice or to become fully involved with your rental property portfolio.