JUNE 2023
MARKET OVERVIEW
HEATING UP
As we move into the summer months, rents continue to climb. Soaring demand and supply constraints will continue to propel properties to let at or very close to asking price.
COMPETITIVE ENVIRONMENT
Rents continue to steadily rise, typical for this time of year, as more contracts come up for renewal and students finish exams and begin their property search. Prime market average rents have risen to £3,825, up 12.3% year-on-year, a rise in all regions, with the exception of the North East and the South East. Demand continues to outpace supply; renter demand is up 42% on 2019 and the number of properties to rent is down by almost half (Rightmove). Many renters are choosing to extend their contract rather than brave the open market, some with deals of three years or more. Over a third of renters would both renew their contract and accept a rent increase if they had a positive relationship with their landlord (Uswitch).
RENTERS REFORM BILL
The highly anticipated Renters Reform Bill has been presented in Parliament, aiming to eliminate Section 21 no-fault evictions and promote the adoption of periodic tenancies rather than fixedterm ones. The aim is to make the private rented sector safer and fairer for renters. Renters will be given two months’ notice for rent increases and the ability to challenge rent rises above the market rate for their home to stop excessive rent increases. Minimum housing standards will be established. The bill also includes measures to benefit landlords, such as rights to reclaim possession, and the creation of a new online portal for landlords. Despite challenging legislation for buy-to-let investors, indicative gross yields remain attractive, particularly for landlords with lower Loan-to-Values on their property portfolios.
£2,870 £3,825 +12.3%£1,350 £1,634 +0.5% £14 £1,900 £2,353 +3.5% £20 £3,900 £5,250 +15.2% £47 £1,200 £1,624 –12.5% £14 £1,510 £1,963 +6.3% £18 £2,200 £2,895 –2.4% £22 £1,800 £2,254 +1.8% £20 £1,400 £1,606 +9 7% £15 £1,420 £1,754 +4.8% £16 £1,250 £1,543 +5.5% £16 Please
note: The change in premium rents for the North East seems disproportionately low. Some of this can be attributed to renters seeking smaller, more affordable accommodation in light of the rising cost of living. There have also been fewer particularly high value lets in the last 12 months which has lowered the premium rent threshold level.
0% 2 5% 5% 7 5% 10% 12 5% 15% 17 5% 20% JUN 2022 JUL 2022 AUG 2022 SEP 2022 OCT 2022 NOV 2022 DEC 2022 JAN 2023 FEB 2023 MAR 2023 APR 2023 MAY 2023
£1,148 £2,870 £3,825
£1,195 £3,000 £3,862
£1,103 £2,690 £3,704
