Will the growth in the lettings market continue?
Although the supply of rental properties is slowly improving (22% higher than in 2022), the number of rental properties available is still 21% lower than pre-pandemic levels.* This, combined with high tenant demand, is driving up rental asking prices that, on average, increased by 10.4% in 2023, and are 28% higher than in 2019.* 71% of landlords, who were surveyed in the second half of 2023, confirmed this increase in demand and, as a result, are finding that void periods and time to let agreed are down.* Based on these numbers, the current expectations for the lettings market are that renters will stay put for longer, and that there won’t be a drastic increase in supply.*
Looking at the HomeLet Rental Index Report, the numbers continue to confirm the continued growth. Average rent across the UK now stands at £1,268 pcm, which is an 8.01% annual increase.** Scotland’s experiencing the highest annual growth in rental prices with 8.45%, while Wales is slightly below the UK’s average, with an annual increase of 7.7%. This means that in Scotland, average rental prices are £911 pcm and tenants are, on average, spending 28.8% of their income on rent.** In Wales, the average rent is £866 pcm, which makes up 34% of a tenant’s income.**
What lettings legislation do I need to keep an eye on?
In Scotland, on 31 March 2024, the extended Scottish Act legislation, which introduced the rent increase cap and a pause on some evictions is due to come to an end. At the time of writing, no other changes in the Scottish or Welsh lettings legislation has been brought forward.
For England, one of the main points of discussion for landlords will most likely be the Renters (Reform) Bill. The Bill had its second reading in October 2023, and has been through the Committee stage; it’s set to pass in 2024. However, before the Bill finally becomes law, it will almost certainly be subject to change as its progress through parliament continues.Stay up-to-date on the current status in our live blog here.
Additionally, the new Right to Rent code of practice came into effect in England only on 22 January 2024. This means that English landlords and agents who do not comply with the Right to Rent laws may face higher fines. Note that tenants do not need to prove their right to rent in Wales or Scotland.