Tenant demand in the UK and London is the highest it has been since records began in 2011. The number of people seeking privately rented homes has grown consistently throughout the course of the Covid pandemic. For every property there are on average 11 potential tenants.
Rental stock is down 38% compared to last year and estate agents ae down to their last properties.
In Q1 of 2022, 62% of landlords reported a big increase in tenant demand, compared to only 16% of landlords in Q1 of 2020. This article from The Negotiator outlines the big changes in the private rental sector.
An interesting article outlining Why the UK rental market is in chaos, which describes it as a ‘pressure cooker’. The UK rental market was already extremely competitive. Now you have people who can no longer buy with the current mortgage market and having to rent. In London, listing are receiving on average over 80 enquiries, up from 16 enquiries in September 2019. There are so many people looking for a rental property, that some agents just don’t list them on the property portals.
At Pets Lets, we specialise in finding pet friendly rentals for clients. The majority of people are looking to move to London. Some are relocating from the US with their dogs and cats as well as from Canada, South Africa amongst other countries. The common theme amongst our clients, is they cannot believe how difficult it is to find pet friendly accommodation.
A growing trend amongst younger generations is to rent with their pet whilst studying. For example, we find a lot of pet friendly students have house cats or small dogs.
We have witnessed many sealed bids with some people putting in huge offers over the asking price. How do people compete, you can’t.
Also, landlords are giving notice to tenants to get a new one it at a higher rent. There is a lack of ‘loyalty’ and tenants are pushing up prices. Even some estate agents put properties on higher prices, just to test the market. When they achieve those prices, the rental level is pushed up even more in the area.
So why is there such an issue with UK rentals?
There is a lack of rental properties. Buy to let landlords are selling up and leaving the market. Less new landlords are looking to buy rental properties. A few years ago, the words capital growth and high rental yields where synonymous with investing in buy to let UK properties. That is no longer the case.
Why have investors been put off? Well, landlords have had to absorb more costs, which was introduced with the 2019 Tenant Fees Act. A good thing to help tenants. However, the government stopped the ability to offset mortgages against tax.
So basically if you have borrowed heavily on a property, your monthly costs may be more than your rent received, meaning you would have to fund the property out of your own pocket. You end making a loss. If the property market falls, you end up losing considerably in negative equity.
So if rents are going up, does that not make the market more attractive for landlords? Yes and no. To enter into the market as a private landlord, you have to pay extra stamp duty , in fact an extra 3% more than on your own home. Again, another deterrent from investing in brick and mortar.
Also, landlords who have had properties for a number of years which need extensive refurbishment are selling up instead. Many find it too much of a hassle and that with all the rules and regulations, would prefer to have ‘cash in the bank’.
Any rental tips for tenants?
If you find a property you like. View it asap and offer on it asap. Those that dither in this market lose out. Don’t wait for the ideal rental property. You always look back and wish you had offered on a particular one.
Sometimes, we have to advise our client looking to rent with pets, that if you have a good property and can agree it, then do not dither as there is so much competition which by reading The Sunday Times Home Section you get a feel for it. Also read this article below from the same publication which sums up the London as well as the UK rental market.
Also, just because the first property Is great, it does not mean others later on will be better.
This article was written by Russell Hunt, Founder of Pets Lets, a UK pet friendly property portal offering properties where landlords consider pets as well as a pet friendly relocation and buying service. Prior to setting up Pets Lets, Russell was a London property search consultant for over 20 years for clients looking to buy and rent in the Capital.
For useful advice or to find out more about the UK pet friendly rental market, feel free to join our Pets and Property Tips Facebook Group for helpful professional advice on pets and property.