There has been a slight shift in the balance of demand versus supply. Properties are sitting on the market for a few days, rather than going in a few hours.
The Chestertons Tenant survey showed that lettings instructions are up 69%. This is good news, as talking to various estate agents, they were down to their ‘last few’ properties. Tenant enquiries are down 12% and the number of letting viewings are up 10%. There needed to be more of a balance.
There is still a high tenant demand as people cannot get a mortgage with higher interest rates and are having to rent longer.
An interesting point from the survey, is that 63% of tenants would prefer the property to be managed by an estate agent. This is all about the company you know, rather than a landlord you have most likely not met before signing the tenancy agreement. That is unless you rent through Open Rent where you tend to meet the landlord in person when viewing a property.
On the property portals, there has been an increase in rental price reductions. The average tenancy period is 23 months. Earlier in the year, many estate agents were getting tenants to commit to a fixed 3 year term without a break clause. This was partly due to the huge demand and landlords asking for the long-term commitment.
The UK property market is changing
- Prior to the sudden rise in interest rates, landlords wanted tenants to commit to a 3-year term. Now with re-mortgaging, some landlords do not want to fix the rent so they have flexibility in terms of an increase in monthly repayments or selling the property.
- There are more emails from estate agents asking if you are looking to rent. The move from a ‘reactive’ to a ‘proactive’ approach.
- Earlier in the year, rent reductions were unheard of. Have we now reached a ‘tipping point’ of affordability?
The pet friendly rental market
With the proposed Rental Reform Bill 2023, landlords will not be able to ‘unreasonably’ withhold consent to rent to a tenant with a pet. Pet insurance can be a ‘permitted payment’.
There will be a rise in the number of pet insurance policies that cover pet damage in a property over the next 12 months. The landlord can either take out the policy and charge the tenant, or the tenant pays for the cover for the term of the rental. The issue some say is that a tenant pays for the first month and then cancels the direct debit. That is an issue some landlords are weary of.
With 48% of tenants preferring to have a pet friendly property, this is not a market that can be ignored.
Summary
Nothing has changed in the sense that rents are high with many tenants chasing properties. However, it is the length of time that properties are on the market before being agreed. You now have a chance to ‘breathe’, instead of rushing over to see a property as soon as you got a call from the estate agent.
This is a sign that the rental market is easing. I wish I could say that finding a rental that allows your cat or dog is any easier. Still many landlords say no to pets and buildings have no pets’ policies. My question is whether the propose Rental Reform Act will ‘make’ management companies change the building no pets’ policies. A point which I am not sure has been addressed.
This article was written by Russell Hunt, Founder of Pets Lets. With over 25 years as a London estate agent and London property search agent covering London and the home counties, as well as a dog owner with a basset/ beagle, setting up the Pets Lets Relocation Service made complete sense. We work with clients from all over the world. Pets are our four-legged children, aka ‘fur-babies’.