The UK's rental market has been in boisterous form as prices have risen strongly, wages have remained fairly flat and the cost of living has meant people are saving less and spending more just to live. Some would say it has never been so good for the rental industry.
Apart from the aforementioned reasons, there is one other key factor: a lack of new property, exacerbated by a swelling population. Although there is a tower construction boom in London (this illustration from Randstad shows just how much the capital's skyline has and will change), demand is massively outpacing the limited supply both inside the M25 and beyond.
But there's a looming change on the horizon that could change things up. And like so many things, you can thank the yanks for it. Corporate renting has arrived in the UK.
It's early days, but the ramifications remain unclear. There are many benefits that will attract paying clients. For example, as the property is an investment owned by the company, it is much less likely to be sold and therefore force any tenants to move elsewhere. Fees could be reduced as tenants would rent directly from a company, rather than through a letting agency. And there's the time honoured promise that should anything go wrong, the company will look after their investment and fix the faulty light switch.
But, before this new import overwhelms you with doom and gloom, there is still a future for the private letting agent and their role as the intermediary with provate landlords. The trend, at least initially, seems to be towards these corporate landlords getting involved at the higher end of the market. That makes sense, because that's where they can maximise your return on investment. But that excludes a lot of potential tenants, who operate in the middle and bottom end of the market.
Standards will have to rise in order to compete with this stability and reduced cost structure. If the idea catches on, the industry as a whole will be forced to change.
Comments