Rents will continue rising as landlords ‘withdraw’

Rents will continue rising as landlords ‘withdraw’

8:03 AM, 30th November 2022, About A year ago 16

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A lack of rental stock because landlords are leaving the PRS and continued tenant demand will continue pushing up rents, researchers reveal.

The data from TwentyEA also highlight that the average asking price for rent across the UK was sitting at £1,605 per month in Q3 2022.

That is 19% higher than in Q3 2019.

Stuart Ducker, the strategic solutions director of TwentyEA, said: “The challenges faced by the lettings sector are laid bare in the Q3 2022 numbers, compared with Q3 2019.

“Lack of supply is compounded on the demand side as tenants are undoubtedly deferring decisions to buy as a result of higher house prices, inflation and interest rates.”

‘As some landlords withdraw from the market’

He added: “In contrast to the owner-occupied sector, there is a marked supply and availability issue, as some landlords withdraw from the market, as tax changes put in place in 2019 have reduced incentives.

“Pressure on the supply and demand side means that this situation is unlikely to improve in the near term.”

Mr Ducker points outs that landlord incentives ‘have been dulled’ by legislative and tax changes, whilst the reduction in the buy-to-let mortgage products will restrict fresh investment.

He said: “Rising rent prices are likely to continue as higher interest rates and inflation may be passed on by landlords, whilst supply constraints and demand pressures continue to apply.”

Lets agreed and new instructions are down by 19% and 25%

The research from TwentyEA also reveals that lets agreed and new instructions are down by 19% and 25%, respectively in Q3 compared with the same period in 2019.

The downbeat performance of the sector is highlighted starkly in its ‘Regional and Major City’ tables.

Researchers say Edinburgh is a top performer for lets agreed at +37.8% compared to Q3 2019, albeit from a low volume of transactions, whilst all other locations have seen double-digit declines.

The largest decline can be seen in Plymouth (-37.4%), followed by Glasgow (-31.0%), Newcastle Upon Tyne (-29.8%) and Cardiff (-25.2%).

As of September 2022, all regions have settled at around 1.5 months of available stock from two months in September 2021.

Rental Lets Agreed by Regions & Major Cities Q3 2019 compared to Q3 2022

Major Cities Change UK Region Change
Edinburgh 37.8% East Midlands -12.3%
Nottingham -12.7% East if England -14.0%
Birmingham -14.7% Outer London -14.2%
Leeds -14.8% West Midlands -16.3%
Southampton -17.3% South East -16.7%
Peterborough -19.3% Yorkshire and The Humber -18.8%
Manchester -19.5% Inner London -20.0%
Inner London -20.0% North West -20.3%
Sheffield -20.1% Scotland -20.7%
Bristol -21.0% North East -23.0%
Norwich -22.9% South West -28.5%
Cardiff -25.2% Northern Ireland -29.9%
Newcastle Upon Tyne -29.8% Wales -31.8%
Glasgow -31.0%
Plymouth -37.4%

Source: TwentyEA Data, November 2022

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11:19 AM, 30th November 2022, About A year ago

A perfect storm is a coming, when you mess with supply and demand. This is bad news for tenants bad already for landlords forced to exit, bad for government unless you count the all the CGT payments coming there way, but good news for big corporate businesses and banks who will be offering box rooms at extortionate rents to students who can ill afford them.


11:40 AM, 30th November 2022, About A year ago

Sold a few flats already the ones that were a little further away or coming up for refurbishment, the payback and hassle are just not currently worth the bother.
You only have one life .
I Will decide if i am selling the rest this year and then move abroad into the Sun ...
Let the Councils and Government deal with the sh!+ STORM they them selves have created.
Would never have thought a Tory government would be so buissnes unfriendly.

Grumpy Doug

12:02 PM, 30th November 2022, About A year ago

I tried to describe the following scenario to my MP.
Example: I bought a house in 2010 for £250k and ran it successfully as a BTL. As a result of excessive government meddling, I sold out 10 years later for £400k, paid my CGT and cleared off a chunk of another BTL mortgage. Rinse and repeat a few times to end up with a virtually unencumbered, albeit smaller, portfolio.
Then in 2025 the government realises that the sh!tstorm it's created needs to be sorted and starts to reverse some of its crazy anti landlord measures to encourage the likes of me to re-invest in housing.
Trouble is, I'm now 65, I'm enjoying not having the hassle, I'm enjoying a few few holidays in the sun. The numbers no longer add up - that £250k house is now £500k. New entrants to the market aren't going to be investing at that level. So sorry chaps, I'm out!
This is happening in Ireland big time. At a peak, they had 23,000 houses available to rent in 2009. Currently less than 1,000! They are trying to tempt landlords back into the market but it's too little, too late.
Suffice to say my MP didn't get it.

Old Mrs Landlord

8:46 AM, 1st December 2022, About A year ago

The fact that TwentyEA think Bristol is in the North East and Norwich in the South West, might cast some doubt on the accuracy of their data!

Silver Flier

10:49 AM, 1st December 2022, About A year ago

Reply to the comment left by Old Mrs Landlord at 01/12/2022 - 08:46
Put your glasses on Mrs L. The left column and % is major cities, the right column and % is UK regions.

Rich Robson

13:23 PM, 1st December 2022, About A year ago

So when we finally say OK you win and sell, who will get the blame then.

Old Mrs Landlord

14:08 PM, 1st December 2022, About A year ago

Reply to the comment left by Silver Flier at 01/12/2022 - 10:49Oh yes, I see, it's two tables in one. My mistake. Thank you for pointing that out SF.

Adrian Anastas

9:25 AM, 3rd December 2022, About A year ago

As landlords we keep being squeezed, so it no wonder supply is drying up. I only have two investment properties, and one of those is now subject to a "selective license" by the local council. Apparently this is to ensure quality of rental properties, but everything they require to get licensed I was already doing, so it's just an extra £700 p.a. out of my profits, or rent increase I'll need to pass on. I'm also expecting a similar hike when my mortgage deal runs out next year, even though I have about 40% equity in the property. Chances are I'll need to sell this property as the tenants won't be able to afford the rent hike and if it makes any profit after that it will be too small to be worth the hassle.


12:20 PM, 3rd December 2022, About A year ago

Currently its a drip drip affecte of landlords selling up as the industry becomes unprofitable, soon it will turn into a torrent as landlords need to re finance eventually becoming a flood ,at that point it will be too late for the Government to do anything .
The ones that will suffer most are the Good tenants who have done nothing wrong .
The Government haven't yet realised they are looking into the Abyss ,that will eventually make them unelectable for a generation,if not longer .

Christopher Lee

17:52 PM, 3rd December 2022, About A year ago

Reply to the comment left by Adrian Anastas at 03/12/2022 - 09:25
Sorry Adrian - How is it £700 pa?

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