Tenants still find it challenging in the current rental market. Even though price increases have slowed down, rent prices are still some of the relatively highest in recent years.
Tenants Moving Costs
According to Zoopla, the costs of tenants moving homes and getting new tenancies have grown at their slowest rate in three years. But they are still increasing as landlords charge more. This is no doubt affected by the rate of inflation in recent years. What other pressures are there?
How Many Tenants Chasing Every Home
For every home on the market for rent, there are 17 potential tenants looking to live in it.
The Way Potential Tenants Chasing Properties Equal Everywhere?
Some areas are hit harder, with one couple in Birmingham saying they felt “defeated, isolated, panicky and angry.” This highlights the real impact of the housing crisis and the cost of living crisis.
Emotional Toll the Housing Crisis Causes
Mike Buller, a 40-year-old, said, “It’s hard to stay motivated at work when it feels like all of the hard work that you do is just to keep your head above water”. Showing how trying to find a rental property can affect all areas of life.
The Rental Market Like in Other Cities
The second city in the UK, Birmingham, has had slower rent rises in recent months, but it is still increasing in many areas.
Is Renting Affordable?
According to Zoopla data, affordability has improved. Rent increases are nearly equal to pay and earnings. The data doesn’t take into account renewals of tenancy agreements.
How Are Prices Compared to Previous Years?
The current year to June saw a 5.7% increase in rental prices, which is the slowest rate of increase since 2021, according to Zoopla data. The cost rose by 1.6% in the first half of this year.
Cooling Rental Markets
Richard Donnel, exec director at Zoopla, said, “We have moved from a red-hot market over the last couple of years to one which is still hot, but cooling,”
How Are Rental Prices Compared to Previous Years?
Although the market has slowed down, rental prices are still 20% higher than just a couple of years ago, which is in line with the increases in the rate of inflation. This increase made tenants make tough decisions, such as sharing or lowering the standards they look for in rental properties.
Reduced Tenant Competition
The slowdown in rental price increases is partly due to fewer tenants chasing each property on the market. Last year, around 30 tenants looked at every available property, compared with 17 this year. This reduced competition has fuelled this slowdown.
What Do Letting Agencies Think?
Some Lettings agencies have reported a reduced waiting list to view properties.
Demand by Students and Graduates
The number of overseas students has reduced, resulting in lower demand for rental properties as they study. Also, many Graduates concerned with the costs involved in rental accommodation have started to return to family homes to save money after university.
Students First Hand Accounts
“About 80% of my friends finished university and went straight home to live with their parents,” said Monty Savage, a former student at Nottingham. He’s paying £1,100 a month and relies on family to help pay other bills.
The Bank of Mum and Dad
Research from Savills, an estate agent, has shown that 57% of first-time buyers had help from their parents or families, which amounts to a total of £164,000 for first-time buyers. This is the highest it has been for 11 years.
Prices Falling in Different Cities
The Zoopla study clearly shows that prices fell in the first half of this year. In addition, rent costs in London, Glasgow, and Brighton were reduced.
Local Markets Differ in Rental Prices
Some areas have more investment, and some areas’ prices are too high, but these have been corrected to make them affordable to the tenant pool.
What Led to Reduced Prospective Tenants
In some circumstances, the reduction we have seen in interest rates on mortgages has helped first time buyers get on the property ladder and stop renting altogether.
Where Can We See the Hot Competition?
Some prospective tenants in Derby said it was ridiculous and that some properties had been taken off the market because other prospective tenants had paid a deposit without seeing the property. They added, “I would understand that in somewhere like London or Manchester, but not in the suburbs of Derby.”
Why Have Costs Risen for Tenants?
Costs have risen because the number of properties available to rent has not increased since 2016, and the demand for renting has drastically increased. Which is why rent prices have shot up.
When Will Renting Be More Affordable?
We have seen a 39% reduction in rental demand. But for low-income families or people on benefits, more supply is the only solution to bringing more affordable housing to the market.
What Should People Do in the Meantime?
People must look for bargains, where they would compromise on some of the criteria for their new home. Once prices significantly fall they then go for their perfect accommodation.
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