29
Jun
Rental market faces another shift in focus
The market for rental properties across the UK has changed again in
recent times, thanks to the fact there have been more people able
to afford to buy homes because of the stamp duty holiday, which saw
a surge in the number of people moving to buy properties in order
to evade having to pay the one per cent levy on the value of their
home.
It was reported earlier this month that the number of people living
in residential rental homes throughout May had dropped quite
significantly. According to haart, this meant that the price of
renting a home was falling.
In May, the average price of renting a property in the UK dropped
considerably, eventually settling as low as £919 per month.
This was a significant 4.3 per cent lower than it had been in April
of this year, and comes just months after a long period of
successive increases in price throughout 2011.
Andrew Benn, managing director of haart residential lettings, said:
"After the record rises we saw in 2011, rents have been slowing
down steadily in recent months, which is good news for prospective
tenants considering renting a property in the near future.
"At the same time, we are seeing long-term tenancies becoming
commonplace, so whilst landlords may not achieve the same rents as
previously enjoyed, they are benefitting from the security of
tenure and with it minimising the potential for expensive void
periods."
This drop in rents has led to more tenants and landlords favouring
long-term tenancies in recent months, because they see the benefits
that can be gained from taking a property on for more than the
traditional period of just six months.
According to Gary Styles, strategy, risk and economics director at
Hometrack, it is seen as essential for landlords that they get a
long-term yield, and are not having to secure a new tenant every
single year, while renters also prefer it because they have a long
period whereby their monthly payments will be at a set price,
rather than risking rises every time they renew.
This was echoed by the chairman of the National Federation of
Property Professionals Mark Hayward, who said that it is likely the
fact more people now see renting as an acceptable way of living as
opposed to a necessity in the short term will mean that these types
of tenancy become ever-more popular with both sides of the rental
market.
He said: "You have got the security of income servicing that
investment. The European model - whether it is Spain, France or
Germany very much supports it.
"Also, if the tenant has got a secured tenancy for a period of time
- we are talking years - then they are far more likely to take care
of that property and invest in it because they are going to reap
the benefits from that investment."
Mr Hayward said that the current trend of downward pressure on the
rental market will not last. He added that the current sector sees
12 to 14 per cent of all homes being occupied by tenants, and this
is a figure which is set to rise above 20 per cent by the year
2020.