Why is the rental market so tight?
The shortage of rental homes in the UK and the rising rents can be attributed to a combination of factors. Here are some of the key factors contributing to this situation:
Lack of Investors: The property market had experienced significant growth in the number of privately rented homes for over a decade due to accessible buy-to-let mortgages and private investors buying properties for renting out. However, recent regulatory changes and economic uncertainty have made potential investors more cautious. This “wait and see” approach leads to fewer new properties being available for rent.
Longer Tenancies: Renters are now staying in their rental properties for more extended periods due to the limited availability of options in the market and the rising rental prices. As a result, the turnover of rental properties has decreased, reducing the number of homes coming onto the market for new renters.
Rapid Rental Growth: The combination of low supply and high demand has led to rapid rental growth, especially in larger cities. When rents increase quickly, existing tenants might be less inclined to move, as the cost and hassle of finding a new place outweigh the potential benefits. This further reduces the availability of rental properties.
Economic Uncertainty: Economic uncertainty, both due to the pandemic and other global factors, can discourage potential landlords from investing in rental properties. Financial instability can also impact people’s decisions to move, as they might prefer to maintain stability in their current housing situation.
Regulatory Changes: Changes in regulations and legislation can influence landlords’ decisions to enter or exit the rental market. New regulations might increase costs or reduce returns for landlords, leading to fewer properties being offered for rent.
Supply Chain Issues: Issues related to the supply chain, such as shortages of construction materials or labour, can lead to delays in property development or renovations, thus limiting the number of homes available for rent.
It’s difficult to predict precisely when the market will balance out again, as it depends on many economic, regulatory, and societal factors. As the market stabilizes and economic conditions improve, some investors might regain confidence in the rental market, leading to increased supply. However, it’s important to note that property markets can be slow-moving, and shifts might take time to become apparent.
- Speak regularly to the letting agent – don’t wait for the property search engine notification. A huge percentage of rental homes do not make it to the search engines because the lettings staff often have someone on their books in mind when they go to value the property. Make sure you are that person.
- Act fast when the agent calls to say they are taking on a flat/house – you need to show the agent that you are keen. It is worth meeting the agent even if the house/flat is not right as it will help the agent understand exactly what you are looking for.
- Don’t dismiss a property if it is unfurnished and you want furnished. If you require unfurnished then consider renting furniture. The same applies if you want furnished. Often the landlord will consider furnishing with property to secure a long-term lease.
- The letting agent has a huge influence over which tenant to recommend so do your best to be accommodating to secure the rental.
- Always ask what is coming up for renewal. Letting agents will normally know a couple of months in advance when rentals will be up for renewal. Ask if anything will be coming up that fits your requirements and keep the contact up.
- Always set the maximum price criteria higher than your budget when using property search engines. There is often room to manoeuvre on price – this way you won’t miss out on all possible options.
- Look at the home sales market for equivalent sized properties and see if there are any suitable properties that have been on the market for a while. If approached with a tempting rental offer, a seller will often consider renting rather than selling their property.
- Spread the word. Tell everyone you know that you are looking for a rental property. Email friends and colleagues. Word of mouth is a powerful tool and you never know what connections you can uncover!
If you would like help with your house search please do get in touch. Visit: www.chilternrelocation.com Email: enquiries@chilternrelocation.com or Call: 01494 672086.
