Across the capital, tenant demand has remained strong compared to previous years. As a result the rate of annual rental growth has stayed persistently high in Q2.
Activity continues to be constrained by low volumes of stock coming to market and prices will no doubt greatly increase as international students flood back to the market looking for 1 & 2 bedrooms before the new term starts in August/September. The majority of tenants are renewing due to the lack of supply and with the Retail Price Index currently at 11.4% rents are increasing.
We continue to have a huge number of applicants and relocation companies on our books looking for properties from 1 to 7 bedrooms. If you have been considering letting out your property now is the time, contact us today for a free market appraisal.
In legislative news the big talking point over the past three months has been The Renter’s Reform Bill which was reintroduced to Parliament in May 2023 after first being promised back in 2019. It aims to deliver a “fairer private rented sector for tenants and landlords”.
The main headlines from the Bill are:
- Abolish section 21 ‘no fault’ evictions and fixed term tenancies. Tenants with an assured tenancy or assured shorthold tenancy will move to a periodic tenancy. Tenants will need to provide two months’ notice when leaving a tenancy. Landlords will need a reasonable circumstance in order to evict a tenant.
- Strengthen the grounds on which landlords can gain possession of the property. These will include if a landlord wishes to sell the property or if they or a close family member wants to move in. If a tenant has been in at least two months’ rent arrears, three times, within the previous three years, landlords will also be able to evict them. There will also be changes to make it easier to repossess a property in cases of anti-social behaviour.
- Landlords will be able to raise rents annually to market levels but must provide two months’ notice of any change, rather than one month as is currently the case. Tenants will be able to challenge above-market rent increases through the First-tier Tribunal (Property Chamber), to prevent unreasonable rent increases being used to force tenants to vacate a property.
- All landlords will be required to join a new Private Rented Sector Ombudsman. The government is saying this will provide impartial and binding resolutions to many disputes and prove quicker, cheaper, and less adversarial than the court system.
- A digital Privately Rented Property Portal will be set up to help landlords understand their legal obligations and demonstrate compliance and to ensure tenants understand the terms of their tenancy agreement. Landlords will be required to sign up and register all properties they let out.
- Tenants will have the right to request a pet in the property, which a landlord cannot unreasonably refuse although they will be able to insist on pet insurance to cover any damage.
It is important to know that nothing has changed at this stage. It could take up to a year for the introduction of the Renters Reform Bill to be passed. Measures contained in the Bill will need to overcome the normal legislative hurdles, requiring Parliamentary time. During the progress of the Bill, it will be subject to amendments and whilst it is understandable that many landlords will be concerned by the abolishment of Section 21 it is not as bad as feared, though the process itself will change, the number of grounds that landlords can use to get their property back will actually increase.
As Plaza Estates is a Propertymark member, we will be updated by the professional body and closely monitor market trends and legislative developments. We remain committed to providing our clients with accurate and up-to-date information to navigate the evolving landscape effectively. We will continue to make the seemingly difficult, simple.