Affordability and summer heat being felt in the lettings market

Affordability and summer heat being felt in the lettings market

9:26 AM, 19th August 2022, About 2 years ago

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Affordability is becoming increasingly important in the lettings market as it continues to heat up over the summer, one lettings agency reveals.

They point out that its rental value growth forecasts for 2022 are being upgraded as stock remains low and demand shows little sign of easing.

That’s according to Nicky Stevenson, the managing director of Fine & County UK who adds that while demand for rental properties is soaring, inflation edging upwards will become an issue.

And that rising inflation rate means there could be another interest rate hike to deal with next month – which could see affordability playing an increasingly important role when tenants are deciding on where to live.

Ms Stevenson said: “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.”

‘Renters are facing increasing pressure to secure properties’

She added: “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 is £3,452, up 13.6% year-on-year.”

According to Ms Stevenson, the tightening legislative environment and rising interest rates are undoubtedly causing landlords to consider their future in the market.

She explained: “However, a survey of over 1,000 landlords has found 73% are planning to maintain their portfolio with close to 1 in 10 set to expand over the next year.

‘Indicative gross yields are attractive’

“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 6% in six regions, with Yorkshire and the Humber and the North West seeing the most significant improvement in yields compared to three years ago.”

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