Welcome to the Zoom Lettings Market Update, a series of articles released on a monthly basis to provide accurate and factual information on all aspects of lettings. In this article, we’ll look at current trends and some big news that came into fruition in the month of October 2022.
The current state of the lettings market is that it is busy. Busy in the sense that for landlords, rental prices remain at an all-time high, and new tenants are being secured within days of marketing. The current cost of living crisis, mixed with heavily inflated interest and mortgage rates, has strongly deterred many from buying. For those looking to move out immediately, the only realistic option is to rent. With such a demand for rental properties, landlords are well positioned to select a suitable tenant paying a reasonable rent.
“The median monthly rent in England between April 2021 and March 2022 was £795 – higher than at any other point in history, according to the Office for National Statistics.” The data evidently suggests an upward trend in rental prices both in the private and social sector.
This means that many tenants are staying put, not wanting to move knowing they will be paying much more for potentially less. This can put you, as a landlord in a tricky position. Yes, your tenants are happy, but could you be charging too little for rent? That is a serious concern for landlords across the country. Whilst wanting to keep suitable tenants is desirable, it could result in landlords not charging as much as they could be, given the all-time high rental prices.
As a landlord, you will have to consider if the rent that is being charged is sustainable. Sustainable in the sense that, is it profitable? Due to taxes, many landlords are finding that their lettings are not as profitable as desired, causing many to sell their property. We strongly encourage landlords to get in touch with our lettings specialists. We’ll work closely with you to ensure that you have desirable tenants paying a rent that is on brand with market averages.
You may also be aware that, in October, then prime minister Liz Truss announced that Section 21 would be scrapped. However, there are no updates on when this will happen and what specifically will be introduced to replace Section 21, barring Section 8 of the Housing Act.
This change will mean landlords must provide lawful justification if they choose to repossess their property. As long as the tenant complies with their contract, they can stay at the property indefinitely. If the landlord is forced to sell the property or wants to move into the property, this is allowed. Essentially, this change will mean that a tenant cannot be evicted without proper reasoning.
To say that this news has brought divided opinions is an understatement. Whilst it looks to provide some control to tenants, many believe that this will impact the lettings market going forward. What do you think? Let us know in the comments below. If you have any questions or concerns surrounding the current lettings market, don’t hesitate to get in touch. Whether you’re looking to rent or wanting to manage your properties, we’re here to help.
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E: lettings@zoomestateagents.co.uk
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