Mon 10 Feb 2020
Over the last twelve months, our market updates have frequently recorded the same trend in the lettings industry – demand is consistently outstripping supply as more and more people are looking to rent a property.
The latest figures from the English Housing Survey record that 4.6 million households now live in the private rental sector, which has grown by over 75% in the last fifteen years. Families in particular have contributed to this growth. Almost a quarter of all new tenancies begun in 2018 included children, and nearly half of all babies born in 2016 were born into rental accommodation.
In addition, tenants are staying in their homes for longer than ever before. The average tenancy now lasts for 4 years and 3 months, five months longer than the average a decade ago. This is excellent news for landlords, as longer tenancies tend to mean stable rental income.
Although there are concerns that rising rents and already high house prices are creating a “rent trap” – especially for families who tend to spend more money on essentials – many tenants rent out of choice because of the flexibility it offers and because recent legislation has made life better for renters than ever before.
Because such a large proportion of the population is now living in the private rental sector, the government has begun to introduce more legislation designed to make renting as easy and affordable as possible. The most recent legislation, the Tenant Fees Act of last year, has reduced the cost of renting as tenants can no longer be charged administration fees and a cap has been placed on tenants’ deposits. More announcements are expected in the March 2020 Budget this year, which is likely to address pets in rental properties and a reform to non-fault eviction clauses.
The standard of rental property has also seen improvements. Properties must now meet a minimum standard of energy efficiency, and this year new electrical safety standards will be introduced. New build-to-rent developments have also started to spring up, especially around London, and these offer high-quality properties with the amenities to suit tenants’ lifestyles – including concierges, gyms, cafes, shops, and communal spaces.
With all these improvements, it is no surprise that the English Housing Survey found that more tenants than ever plan on renting for the long term – with a record high 44% saying that they don’t intend to buy at all in the future.
Consequently, we expect the rental sector to continue to grow over the coming years.
If you are a landlord, or thinking of becoming one, now is a good time as the lettings market continues to grow and bring in stable returns for our clients. You can speak to our team about letting your property here.