11 Sep

Demand for rental property increases

Demand for rental property increases

The demand for rental real estate is continuing to grow, according to a new report.

Figures from Sequence show interest in rental homes has risen by 18 per cent across the UK over the past year and seven per cent since June.

This has been accompanied by a fall in supply, with a 19 per cent decline in rental properties on the letting market.

It is now estimated that each UK rental property has seven potential tenants competing for the keys. This increased interest means there has been a rise in letting prices, with the average tenant based outside of London paying £697 per month in July, compared to £670 at the same point in 2013.

Rents within the capital have increased by six per cent over the past year and now stand at £1,515.

"The rental market across the UK is increasingly competitive with demand rising at the same rate at which supply is dropping [while] activity in London's rental market is even more abuzz," said Stephen Nation, Sequence's head of lettings.

"This severe shortage of rental properties coming onto the market means that rents in the capital have increased."

Traditionally, an increase in interest in the rental market has been linked to a fall in buyer demand, with more people opting to rent rather than step on the property ladder.

However, a number of recent figures suggest that although some areas of the property market are cooling, demand remains strong as buyers suffer from a continued shortage of supply.

Rental payments are also increasing faster than wages and this could put increased pressure on households. Data from the Office for National Statistics shows that total pay including bonuses declined by 0.2 per cent in the three months to June, with regular pay increasing by just 0.6 per cent.

However, experts are predicting that the shortage of properties could be lessened over the coming months as changes in pension rules may encourage more people to consider buy-to-let properties.

A recent flat up for rent in London highlighted the strong demand from tenants. Located in North London, a room was successfully rented to a couple for £420 per month - even though it could only be accessed by crawling.

The tenants had to squeeze through a space just two feet and three inches wide and three feet and 11 inches high to get in to their top floor bedroom in Hendon, North London.

Following an investigation by the local council, the landlord of the property was fined £1,500 and ordered to pay £1,420 in costs and a victim surcharge of £120.

Councillor Tom Davey, chairman of the Housing Committee, said: "At the very least tenants have the right to expect that the accommodation they are renting is safe.

"Barnet Council is keen to work with landlords and help them to provide safe accommodation.

"However, those who exploit tenants for financial gain will not be tolerated and the appropriate action will be taken."ADNFCR-1222-ID-801747896-ADNFCR

Cookies We use cookies to ensure that we give you the best experience on our website. To find out more about our cookies policy, see our cookies policy here or in the footer.