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.