Rental Market Update – What are the trends and challenges?

The rental market in England has seen significant reform and scrutiny in recent years and as we make our way through 2024, it is important for both landlords and tenants to stay informed about further challenges ahead.

One of the major trends in the rental market is the increasing demand for rental properties.  With  rising house prices and stricter mortgage regulations, more people are opting to rent rather than buy a property.  This has led to a surge in demand for rental properties across the country, especially in major cities like Manchester and Birmingham.  As a result, rents have increased, making it more challenging for tenants to find affordable accommodation.  Preston has emerged as a prominent property hotspot according to the latest data from Rightmove*.  The average asking rent in the area has surged from £687 to £833, indicating a significant 21.3% increase from Q4 2022 to Q4 2023.

In light of this, the rising demand for rental properties has created opportunities for landlords. With more potential applicants in the market, landlords can be more selective in choosing tenants and of course are able to charge higher rents.  This has led to an increase in the number of buy-to-let properties as investors look to capitalise on the growing demand.

Along with these trends, however, a major test for landlords is the increasing regulation and legislation that needs to be complied with to be able to let a property legally.  The government has implemented various measures to improve the rights and protection of tenants, including the introduction of minimum energy efficiency standards and the banning of letting fees.  The forthcoming Renters Reform Bill is poised to have a substantial effect on landlords.  Despite ongoing debates in parliament, it remains a top concern for every landlord.  Whilst these measures are beneficial for tenants, they can impose additional costs and create an administrative burden for landlords.

For tenants, the major challenge remains finding affordable and suitable accommodation, with high demand for rental properties, coupled with rising rents, making it difficult for many tenants to secure a property within their budget.  Shortages have led to a rise in rental bidding wars, where tenants offer to pay higher rents in order to secure a property.   Additionally, tenants can face issues with insecure tenancies and the lack of long-term rental options, making it harder to establish stability and roots in a particular area.

As we look ahead, it is anticipated that the rental market across England will continue to see rental prices rise, albeit at a slower pace, as demand remains high.  Landlords will need to navigate the changing regulatory landscape and ensure compliance with new legislation, but our lettings team are very much here to help, across Lancashire and Cumbria.

For further advice and updates please contact a member of our lettings team.

*Statistics from Rightmove Data Janaury 2024