Tenants are staying put in their current homes rather than being potentially affected by record rents by moving to another property according to research from a property website.
In the first quarter of 2022, the average rent being advertised across the UK (excluding London) stood at a new record of £1,088. This is an 11% annual increase.
In London specifically, average asking rents have increase annually by 14% (£2,195 per calendar month).
According to the property search portal, the market is extremely competitive as more than triple the number of tenants are inquiring as new properties come to the market.
Despite more enquiries from tenants, there is a lack of stock. It is suggested that the low levels of stock stems from current tenants extending their tenancies.
Propertymark, the professional body for UK property industry, has released their Private Rented Sector Report (July 2022) which found that 73% of agents reported tenancy renewals increasing on the last year.
The economy is expected to enter recession towards the end of 2022 which could be the reason why tenants are choosing to stay put. Once the period of recession blows over, there will likely be a decrease levels of market activity.
If market activity reduces and fewer buyers battle is out for available stock, this could lead to house price growth cooling down which could cause a drop in property values.
With demand remaining high for rental properties despite low levels of stock, this has led to property professional expecting rents to rise significantly in the next three months.
Tim Bannister, Director of Property Data commented: “A shortage of rental homes and strong demand for the properties available has led to a greater number of tenants choosing to renew their leases and stay put, rather than re-enter a competitive rental market”
Along with rental costs, living costs have soared. The property website has suggested that tenants are focusing more on properties where bills are included.
Over the last 12 months, enquires from tenants who wanted bills included within the total cost has jumped by 36%. This is the biggest increase out of all available features on the website.
The CEO of Propertymark, Nathan Emerson, said: “The private rental market continues to be battered by the perfect storm of high demand, low availability and affordability issues that shows no sign of easing.
Governments across the UK are all engaged in a tenant-focussed reform of their private rental sectors. They also need to consider the heavy tax burden on property owners, the impact of more profitable and less regulated short-term lets, many of which stand empty for part of the year, and the lack of new homes being built to cope with the varied needs of a growing population.”