Affordable homes to rent are ‘scarce and in high demand’

Affordable homes to rent are ‘scarce and in high demand’

0:02 AM, 30th October 2023, About 6 months ago 5

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Finding a cheap rental home in the UK is a daunting challenge with only 1.9% of the current rental market stock costing less than £500 per month, research reveals.

The analysis by Zero Deposit highlights that this is the lowest level of stock of all the rental market price bands they looked at.

However, the cheapest end of the market is also the most competitive, since 76.2% of the available homes have already been marked as ‘let agreed’.

This means that tenants with the smallest budgets have very limited options and face fierce competition when looking for a home they can afford.

‘Searching for the most affordable rental properties’

Sam Reynolds, the chief executive of Zero Deposit, said: “Tenants searching for the most affordable rental properties are facing an insurmountable task, as there’s a real shortage of affordable stock and these properties are being snapped up quickly when they do reach the market.

“It’s this market segment that is being forced to heavily compromise on their next home while being under considerable financial pressure to fund the move.”

He added: “Of course, it still remains a challenge for those who are willing or able to spend more, but supply and demand are more equally weighted at the mid-range of the market.

“However, many tenants simply don’t have the luxury of splashing out more on the cost of renting as they are already struggling to secure even the most affordable rentals.”

Demand for these homes to rent

The firm also analysed the proportion of homes available at each price threshold, as well as the demand for these homes to rent based on the number that have already had a let agreed.

The data shows that the middle of the market is more balanced, with lower demand and higher supply for properties with asking rents between £500 and £2,000 per month.

Some 26.1% of the UK’s stock costs between £500 to £1,000 per month, with 53% of rentals already snapped up.

Between £1,000 and £1,500, the figures are 22.1% and 52.4%, respectively.

At the higher range of £1,500 to £2,000, supply drops to 16.1%, while demand rises to 57.9%.

The research also reveals that there is a growing prime rental market in the UK, as 33.9% of all rentals are priced above £2,000 per month.

These properties are in high demand too, as 75.2% of them have already been let.


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Comments

GlanACC

9:56 AM, 30th October 2023, About 6 months ago

There are a number of companies around my area that are offering 'zero deposits'. Not quite sure how these work, whether they are lending or insurance based. As far as I am concerned if a tenant uses one of these they would not be eligible for renting a property. I presume the 'zero deposit' company must make some money out of it somehow.

Seething Landlord

10:28 AM, 30th October 2023, About 6 months ago

Reply to the comment left by GlanACC at 30/10/2023 - 09:56
"As far as I am concerned if a tenant uses one of these they would not be eligible for renting a property."
These schemes are offered by the landlord, not the tenant.

GlanACC

12:02 PM, 30th October 2023, About 6 months ago

Reply to the comment left by Seething Landlord at 30/10/2023 - 10:28
didn't know that, still the same though, can't afford the deposit = no rental

Seething Landlord

12:39 PM, 30th October 2023, About 6 months ago

Reply to the comment left by GlanACC at 30/10/2023 - 12:02
It's not that straightforward.

The tenant pays a premium for an insured guarantee which can be for more than the maximum deposit of 5 weeks rent, the landlord avoids the issues around deposit. protection.

It is not without its drawbacks but is one way of achieving the government objective of eradicating the problem facing tenants who have to fund a new deposit before retrieving the old one from their existing landlord. They are apparently actively considering legislating to make transferable deposits compulsory and this type of scheme provides a potentially more viable alternative.

I am not advocating or recommending the insurance option, just pointing out that it is not a simple question of the tenant being unable to afford the deposit.

If you don't like it, don't offer it, it's your choice, at least for the time being.

GlanACC

13:19 PM, 30th October 2023, About 6 months ago

Reply to the comment left by Seething Landlord at 30/10/2023 - 12:39
No, I won't be offering it.

Also, I recall now that some tenants are saying that the landlord should 'pay the premium' not the tenant, I awate a fancy legal begal to take this up

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