A lettings agency chief says the rental market continues to be red hot but with affordability beginning to play a part in renters’ decisions.
Nicky Stevenson, managing director of Fine & Country UK, says that while demand for rental properties is soaring, inflation continues to edge upwards and with another interest rate hike to deal with, affordability will increasingly play a role.
“Traditionally the busiest time for the rental market, August and September have vied for top spot for new tenancy starts for many years. In both 2019 and 2021, more new tenancies were started across England and Wales in August than in any other month, and it is likely August 2022 will be no exception” Stevenson comments.
“With strong demand and available properties to let still in short supply, renters are facing increasing pressure to secure properties before the start of the new academic and employment year. The average rent in England and Wales is now £1,081, the average premium rent £3,452, up 13.6 per cent year-on-year.”
According to Stevenson, the tightening legislative environment and rising interest rates are undoubtedly causing landlords to consider their future in the market.
“However, a survey of over 1,000 landlords has found 73 per cent are planning to maintain their portfolio with close to 1 in 10 set to expand over the next year” she says.
“For those in the market, indicative gross yields are attractive and have risen in all regions of England and Wales, including London compared to three years ago. Analysis indicates the indicative gross yield exceeds six per cent in six regions, with Yorkshire and the Humber and the North West seeing the most significant improvement in yields compared to three years ago.”