Rents And Demand For Landlord’s Property Grows
The demand for private rented property as well as rents is continuing to grow in the UK, according to a survey.
HomeLet says that in July rents across the UK rose to underpin the rises seen through the year but the firm is predicting a rental slow down for the latter end of the year.
Excluding rents in London, landlords who agreed new tenancies over the last three months saw rents rise by 2.3%, compared with the same quarter last year.
However, landlords in London saw their rents rise by 4% over the same period.
The rise in rents comes in spite of economic uncertainty that has been created by the Brexit vote and the rise matches the growth in mortgage lending which has also led to house prices rising after the referendum vote took place.
Landlords will see demand remaining consistent
The report also highlights that landlords will see demand remaining consistent as the UK's population continues to grow and house prices remain unaffordable for many. In addition, there is a lack of new homes becoming available and a drop in social housing supply which will, says HomeLet, lead to the private rented sector delivering vital housing in the years, if not decades, to come.
The chief executive of Barbon Insurance, Martin Totty, said: “Rents are determined by supply and demand and we know with population growth demand will continue to increase and housing stock is not growing to meet demand.
“Rents, however, are ultimately limited to the tenant’s ability to pay but they are likely to continue their climb though at a slower pace that we've seen recently.”
He added that no one in the sector is quite sure how Brexit will affect the industry and it will take several months yet before trends become more established though the HomeLet report will become 'more interesting' as the year progresses.
Private rented sector needs more family homes
Meanwhile, one of the country's leading letting agents says more family homes are desperately needed to meet growing demand.
Belvoir has a 170-strong franchise network which is seeing strong demand from tenants for two and three bedroom homes but these are in short supply.
The firm's managing director, Dorian Gonsalves, said: “This confirms the pressure the private rental sector is under and we are witnessing the repercussions of anti-landlord initiatives introduced at the last budget.”
Mr Gonsalves added that around half of tenants are renting for between 13 and 18 months while 40% are renting a home for 19 months and more.