Excited lady

Lettings market booming as tenants look for new homes

It's been a record breaking summer

We’re currently seeing a booming rental market with rising demand for property, as tenants look for new homes after lockdown.

There have been many changes to the lettings market over recent years which have seen landlords question whether or not to stick with buy-to-let. But the latest property research brings some welcome news.

The first six months of the year have been the busiest since 2000. In May 2021, house price growth was 4.7% year on year - more than double the rate in 2020*. Property prices are still growing at the fastest rate since 2007*, proving that bricks and mortar remain a resilient investment opportunity.

Rental values across the UK now average over £1,000 (excluding London, although rents here have risen for the first time since the start of the pandemic) and are up 6.2% year on year – some regions even seeing a 10 year high**. This is fantastic news for landlords.

Normal average asking rent for all property types (excl. Gtr. London)
Quarter Avg. asking rent per month

Quarterly change

Annual change

Q2 2021

£1,007

+2.6%

+6.2%

Q1 2021

£982

+1.1%

+4.2%

Tenant demand continues to rise

Demand for rental property continues to rise and outstrip supply. This low supply, high demand dynamic has helped to push up rental values. Enquiries to agents for rental property are up 10% compared to June 2020**, which means there is no shortage of tenant availability. In fact, the average number of new prospective tenants registering with branches is up month on month and shows no sign of slowing down.

Demand for property is also being injected back into city centres as more and more people are returning to offices.

The table below shows some of the places experiencing the greatest annual change in rental values**. If you’re interested in seeing whether your property sits in a UK hotspot, take a look at our latest ‘property hotspots’ blog post.

Area

Avg. asking rent per calendar month June 2021

Avg. asking rent per calendar month June 2020

Year on year change

Rochdale £947 £713 32.7%
Folkestone £1,144 £902 26.7%
Farnham £2,033 £1,696 19.8%
Altrincham £2,129 £1,779 19.7%
Sevenoaks £2,368 £1,985 19.3%
Bognor Regis £1,285 £1,081 18.8%
Hockley £1,162 £981 18.4%
Blackpool £754 £638 18.1%
Camberley £1,778 £1,516 17.3%
Shrewsbury £938 £804 16.7%

Why letting remains resilient

We understand things haven’t been easy for landlords in recent years, with changes like:

  • An additional stamp duty charge for second homes
  • Mortgage interest tax relief tapered down
  • New regulations for houses in multiple occupations
  • Tightening of energy performance regulations
  • More stringent electrical safety standards

However, buy-to-let can still be a lucrative investment. Landlords up and down the country are staying in the market and even feeling confident – with the increase in demand for rented accommodation, rising property values, and rental prices all offering a great opportunity.

Tenants too can have confidence – regulation changes are there to help provide them with fit-for-purpose accommodation, zero deposit schemes make renting more affordable and there are specific insurance policies designed to help with contents and possessions damage or loss.

How tenants and landlords can succeed together

Whatever happens in the market, there are ways to strive for a good outcome for all parties, if landlords follow some sensible guidance;

  • Property match – who is the property appropriate for tenant-wise? Think about the location and amenities and who they might be best suited to. Not only will you get the right tenant, but a fair rent can be set in line with the value of the benefits the property brings to the tenant.
  • Property presentation – legal requirements aside, a well-cared-for, nicely maintained property with the facilities tenants would expect will help you attract more tenants – and find the one that is best suited for the property.
  • Setting a fair rent – take a look at the rental value of similar properties in the area. Get a free valuation from local agents. There are simple ways to benchmark your rental value which will help ensure you get the rent you need as well as setting a fair market price for your tenant.
  • Think long-term – by matching your property to the right tenant and by setting the right price, you are helping to set the groundwork for a long term tenancy. A happy tenant who is treated well is more likely to stay settled in your property.
  • Be safe and legal – underpinning the above is making sure your property follows all the current regulations, from electrical safety to Right to Rent checks. It can be over-whelming or complex – if you have doubts a good letting agent will be able to help and save you from worry.

What next?

As demand continues to rise and the number of properties decreases, rent prices may inflate further, so we will continue to support both landlords and their tenants throughout this busy market.

There is no guarantee that the future will continue as the past has but the signs are positive, and with a sensible approach landlords and tenants can both benefit.

Successful letting starts with an accurate valuation. It’s worth finding out how much you could let your property for – or even if you’re charging too much or too little.

*Office of National Statistics / * https://www.zoopla.co.uk/discover/property-news/house-prices-jump-by-gbp10-000-in-a-year/  **Rightmove rental market report Q2 2021 / ~Zoopla rental market report May 2021

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