PRS in 2014? What will happen to tenant numbers?

by Kirsty McGregor

14:58 PM, 3rd October 2013
About 5 years ago

PRS in 2014? What will happen to tenant numbers?

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PRS in 2014? What will happen to tenant numbers?

It’s that time of year again when all the predictions for next year start to be rolled out. We are compiling our own report too.

I don’t know about you but I’m reading conflicting information about the future of the PRS. What will happen to tenant numbers

“Generation Rent” says the numbers of renters are increasing year on year, but I also know, without doubt, that the “Help to Buy” scheme will mean that hundreds & thousands of existing renters leave the rental market in favour of home ownership, probably starting imminently and the ‘Build to Rent’ scheme will increase supply of new build properties.

What do you think all this means for landlords?

I’ve got my thoughts, but I’m curious to see what others think.



Comments

Adam Alexander

15:06 PM, 3rd October 2013
About 5 years ago

We typically receive around 6 decent enquiries for every property to let, that figure is upwards of 30 for properties in some areas, particularly London.

We have had some tenants asking us whether their landlords would be interested in selling their properties as they are now in a position to buy with the assistance of the Help to Buy scheme.

We anticipate higher than normal tenant turnover in 2014 and a slight to moderate softening in tenant demand.

This could mean some landlords best tenants will buy leaving more of the less financially astute people still wanting to rent.

What perfect timing that we have just updated our FREE Guide To Finding Perfect Tenants.

Please see the link below for more information 🙂
.

Kirsty McGregor

15:39 PM, 3rd October 2013
About 5 years ago

haha you come from good stock Adam - pay me later for that perfect intro!

So it sounds like the properties most likely to be hit are those that are housing professionals & good quality family tenants doesn't it?

Hmm just what I thought....

Mark Alexander

16:02 PM, 3rd October 2013
About 5 years ago

Reply to the comment left by "Kirsty McGregor" at "03/10/2013 - 15:39":

Younger brother (not as good looking though) is learning fast LOL
.

Tony Atkins

16:24 PM, 3rd October 2013
About 5 years ago

There could also be a reduction in rental supply, as Help to Buy and greater mortgage availability helps chains to develop, freeing up "reluctant landlords" to sell. This will reduce the availability of properties to rent, as more are sold to owner-occupiers, and this will help supports rents. I agree though that landlords may see a drop in the quality of tenant.

Kirsty McGregor

16:52 PM, 3rd October 2013
About 5 years ago

Thanks Tony, it's going to be an interesting one to watch isn't it? The balance between the reduction in supply from landlords selling vs the increase in supply from developers. I think around 10k properties are due to be built from Round 1 Build to Rent developers, but I know of other developers who didn't receive any of the govt funding, but that are also doing the same thing, as they've spotted the opportunity in the market.

I wonder if it will go the same way as the PRS student housing market, which have been affected over the last 10 years or so by the rise of the privately owned, purpose-built student accommodation buildings? A report from Unipol in 2010 stated that in various areas of Leeds (previously student heartlands), between 15% and 30% of bed spaces were vacant for the academic year, despite an increase in student numbers as the 2 major universities continued to increase their intake.

Mark Alexander

17:10 PM, 3rd October 2013
About 5 years ago

Reply to the comment left by "Kirsty McGregor" at "03/10/2013 - 16:52":

If only the government would allow self invested pension funds to invest into build to let developments and student developments the supply demand ration would improve much quicker. I'd have my pension money invested into such developments like a shot.

Instead, the government prefers me to gamble my pension funds on the stock market or worse still, unregulated off plan Caribbean hotel developments which will probably never be built. The mind boggles!
.

Vanessa Warwick

17:10 PM, 3rd October 2013
About 5 years ago

As the housing market improves, a lot of "accidental" landlords will find that they are able to sell their properties and will exit the market.

As Universal Credit kicks in, there will be a big fall out and many landlords will exit the market.

As interest rates rise, "zombie" landlords will finally fail and have their BTL properties repossessed.

On the above basis, I don't see rental demand diminishing ... only growing!

Kirsty McGregor

17:29 PM, 3rd October 2013
About 5 years ago

Reply to the comment left by "Vanessa Warwick" at "03/10/2013 - 17:10":

Hi Vanessa,

I didn't think Universal Credit kicked in yet? And is going to take several years to roll-out anyway?

And BoE (so far) have said that they don't expect interest rates will rise until 2016. Albeit the banks are trying to increase margins as we've seen...

So longer term, yes I agree the future is brighter for increasing rental demand. But I do think there may be a short-term dip next year when Help to Buy kicks in quickly. Will be interesting to see how many landlords hold on and deal with short-term lower income, for the hoped-for longer term, continued capital gain.

Tony McVey

19:21 PM, 3rd October 2013
About 5 years ago

I would love to be as optimistic as some of your
contributors, but here in Liverpool, for various
reasons, demand has slowly declined over the
past 30 years. I cannot see any radical
change in the situation in the near future unless
many landlords exit the business because of
impending mandatory licensing.

john handley

20:22 PM, 3rd October 2013
About 5 years ago

not been much help to me when you have finished slaping yourselvs on the back people like me are not waving biut drowning

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