OCTOBER 2023
MARKET OVERVIEW
SOARING RENTS
Demand for property is outpacing supply and rental value growth is firmly in positive territory, having been in double digits for 18 months. Energy efficiency remains important to renters.
RENTAL GROWTH
The average rent on newly agreed rental contracts reached £1,276 in September, a 10.1% year-on-year increase (HomeLet). The prime rental market is also strong, with regional growth of up to 14.2% (South West). Rental growth is forecast to end the year at 9%, then slow to 5–6% in 2024 (Hometrack). Demand continues to be extremely strong, with three quarters of agents saying there are over 11 applicants per average listing on the rental market, and 45% reporting more than 20 (Dataloft Inform Poll of Subscribers). Rental growth continues to outpace earnings, although over two thirds of agents surveyed said they had not seen an increase in renters falling into arrears (Dataloft Inform Poll of Subscribers).
LANDLORD COMPLIANCE
The previously proposed regulation to require rental properties to have a minimum EPC rating of C for new tenancies by 2025, and for all properties by 2028, has now been scrapped. However, research shows that four out of five UK landlords have already made preparations to comply, and almost half of landlords have spent between £500 and £20,000 on improving or investing their property in the last year (Shawbrook Bank). However, this investment will not have been futile in terms of time and resources; upgrading energy efficiency is likely to make a property much more attractive to renters. 78% of renters surveyed said that the EPC rating was important (Dataloft, Property Academy Renter Survey 2022).
£2,900 £3,802 +6.4%£1,390 £1,684 +4.7% £14 £1,950 £2,403 +6.1% £20 £3,950 £5,252 +7.9% £47 £1,160 £1,560 +6.6% £14 £1,600 £2,004 +6.4% £19 £2,300 £3,047 +0.2% £23 £2,100 £2,920 +14.2% £24 £1,400 £1,629 +5 1% £15 £1,500 £1,840 +5.1% £16 £1,300 £1,615 +8% £15
0% 2% 4% 6% 8% 10% 12% 14% 16% OCT 2022 NOV 2022 DEC 2022 JAN 2023 FEB 2023 MAR 2023 APR 2023 MAY 2023 JUN 2023 JUL 2023 AUG 2023 SEP 2023
£1,169 £2,900 £3,802
£1,212 £3,000 £3,814
£1,128 £2,750 £3,726