The strong demand for rental properties

If you are thinking of renting a home at the moment you may change your mind after this article. Over the past 12 months the UK’s rental properties have soared and many are struggling to find affordable homes to rent. 

 

If you are thinking of renting a home at the moment you may change your mind after this article. Over the past 12 months the UK’s rental properties have soared and many are struggling to find affordable homes to rent. 

In London the average house rent price is around £1,515 meaning it has risen 6 per cent since last year and outside London a UK tenant will be paying around £697 a month compared to £670 last year. A lot of research has been carried out by hundreds of letting agents and the surge has increased rents all the way across Britain.

There is also a huge demand for properties to rent in the UK and this figure increased by 18 per cent since last year and increased by 7 per cent since June. The report also said that supply of properties decreased by 19 per cent. In London there was an increase of more than 50 per cent in July since last year.

Stephan Nation, Sequences head of lettings said: “The rental market across the UK is increasingly competitive with demand rising at the same rate at which supply is dropping [while] activity in London’s rental market is even more abuzz. This severe shortage of rental properties coming onto the market means that rents in the Capital have increased by 6pc annually to £1,515 per month.”

Normally, you would relate a strong rental market with a weaker buyer demand; this is because there are more home owners deciding to rent over owning a home. This is not necessarily true. Mr Nation said: “There is a common misconception that when the sales market is booming the rental market lags behind, but our figures disprove that theory entirely. The annual growth of rents across the UK highlights just how far the rental market has come in 2013 and with transactions up 13 per cent annually it is clear that the demand for rental property is stronger than ever,”

Many house price guides are showing that even though the property market is calming down, the demand for housing is still huge. This suggests that there is a shortage of homes or properties available to buy or rent. The fact that rent has increased also makes it hard for Britain’s households because the rent is above the average wage growth.

The Office for National Statistics shows us that regular pay went up by only 0.6 per cent whereas total pay including any bonuses tightened by 0.2 per cent in the three months running up to June. This compares with the year earlier.

The sequence suggests that the shortage of rental properties should ease off in the next few months. Mr Nation said: “This should filter down to the supply level over the coming months so ease the shortage of property to rent. Brokers are promoting the higher number of buy-to-let mortgage products on the market as lenders put more emphasis on lending to lower loan to value buy-to-let borrowers,”