It's Time to Talk Rentals
The housing market is not only about house sale prices
There is always much talk about house prices. That is, the sale price of houses. Especially now as we come out from the pandemic, this is a popular topic. But house sales are only one part of the equation. For many people, the price of rental properties is far more important. And not only those who are renting.
Private landlords account for a significant proportion of the supply of rental property. Through this activity, the housing market remains functional. These private landlords drive economic growth. Of course, they also provide generally good quality homes.
With so much discussion of sales prices, it is easy to overlook the rental market. In some areas of the UK, the number of properties available is low. As a proportion of total housing stock, the South West has the lowest level of availability. Here, just 1.5% of the total rental stock is listed as being available. Outside of London, most of the country is less than 4%.
These figures are from a study by Sequre Property Investment. They are borne out by figures from our own PropTools. Both sources point to a shortage of available rental stock across most of the UK.
Such a shortage will inevitably lead to price increases. This will be especially true in areas where there is acute lack of supply. Landlords will look to these areas partly because of the income potential. But also because a shortage of supply means they can pick the best tenants. The ones most likely to settle down, set up home and stay a long time. Both landlords and tenants benefit from long-lasting tenancies.
There will be fears that supply shortages will push down quality. We hope that this will not be the case. Without doubt, recent legislation has done much to ensure standards remain good. Unfortunately there will be a small number of substandard rentals. Tenants should simply avoid these.
At Lets Delight we would like to see more national debate around rental prices and standards. Around increasing the length of tenancies to bring more certainty. The focus has been on the sales market for too long. It is time to bring rentals into the arena.