It’s a well-known fact that there’s a substantial lack of affordable homes nationwide. We hear about it on the news regularly and over time, many have promised to address the issue. However, the stark truth is that it has fast become a crisis.
This has had a knock-on impact for the rental market. There are actually fewer and fewer rental properties available across the whole of the UK. This means that although affordable housing available to buy is increasing, albeit too slowly for market demand, property that is readily available to rent is steadily reducing. And when something is in high demand, evidently its price goes up.
From October this year, the record for fewest available rental properties on the market smashed the previous record low in Quarter 3 of 2015. This was even more stark in London, where the drop in availability was huge, a decrease of almost 25%.
According to the Independent newspaper, average asking rents in London hit a record high of £2,034 pcm as landlords increase prices whilst demand is high. When you put this figure up against a ‘rest of UK average’ £828 pcm, the contrast is clear, and that’s not likely to change anytime soon.
Of course, we do have to also consider that just because a landlord advertises a specific asking price, it doesn’t necessarily mean that he or she will get it. This means that the figures of actual rent amounts paid may well be significantly lower than the £2,034 pcm stated, depending on the location within London where you focus.
For example, across our core areas of London and Surrey, according to our research, we’re seeing some trends develop. Outside London, in Egham – traditionally a fairly affluent commuter town – houses are being let for an average of £,1505 pcm which is a 12.2% increase over the last 12 months. What’s interesting though, is that the percentage of tenants aged between 18 and 29 has gone up by a 58.5%. These findings are replicated in other commuter locations outside London where the demographic of renters has traditionally been in higher age-brackets.
Properties in Sunbury-on-Thames let for an average of £1,297 pcm, a 2.4% increase since last year, but we see a staggering 37.7% increase in tenants aged between 18 and 29. Likewise, in Twickenham, as in Egham, houses let for an average of £1,505 pcm and we’re seeing an increase of 34.5% of 18 to 29 year old renters.
What is clear, is that the property market is being skewed towards younger people not being able to afford buying a house, and therefore it’s 18 to 29 year olds that are flooding a shrinking market.
Londoners pay the highest rents in all of the UK, with properties in Brook Green and Chiswick reaching an average rental value of £1,682 and £1,476 for flats and £2,627 and £1,983 for houses respectively.
Although annual rent increases in other big UK cities like Manchester are comparable (3.3% compared to 3.5% in London), the average rent paid is still only £741 pcm, half of what Londoners pay.
Because of a government crackdown on rogue landlords, more and more reputable landlords have also left the rental market, disillusioned by increased administration costs and fees.
Consequently, this means that we’re heading towards a situation of having significantly more people seeking to rent, but fewer and fewer properties available on the market.
On our website, we offer an up to date Rental Price Index which will keep you informed about your local area’s property numbers and averages over the last twelve months, as well as the demographic of tenants renting in the area.