Here we look at the five rental trends that may impact the rental market that you need to be aware of…
5 Rental Trends You Need to Understand as a Landlord
- The abolishment of ‘no fault’ evictions, Section 21
Without Section 21, landlords will be required to go through the courts to gain possession of their property, where there is a legitimate reason.
Usually, a Section 21 notice gives your tenants at least two months’ notice to leave your property. However, during the pandemic this has been extended. If you give your tenant notice after 29 August 2020, the notice period must be at least six months.
- Home ownership rates are declining
The current trend indicates that home ownership rates have declined recently and may continue to decrease. The main reason is the challenge in saving for a deposit.
Currently 71% of young families said they are renting because they don’t have enough for a mortgage deposit. This number may increase with the impact of COVID-19.
- Many tenants expect to continue renting for the next few years
The latest trend sees 93% of the Baby Boomer generation expecting to continue renting for the next few years.
Their reasons include:
- Not wanting to pay high stamp duty fees
- Freeing up cash to help family members
- Creating a new investment source by selling their home
- Choosing a city-central lifestyle
- Reduce expenses
A recent survey by Knight Frank found that an additional 560,000 households are expected to be living in the private rented sector by 2023.
- The key drivers for tenants in private rentals
Up to 61% of tenants said affordability is the main priority when deciding which property to rent. The key factor is choosing a property based on whether the rent is within their budget.
The next key driver for choosing a rental property is the location, followed by the indoor size of the property.
Tenants are focused on the ‘internal’ benefits of the property (such as the size of rooms, the amount of light) compared to the ‘external’ factors (such as proximity to transport or local shops).
- The largest tenant group are the sharers (Millennials to 40-something)
In 2019, the largest group living in private rental accommodation was found to be the Sharers(Millennials to 40-somethings sharing with friends) according to a recent survey by Knight Frank.
This age group says the challenge with saving a mortgage deposit is the biggest setback to buying a home.
The other reason for this trend is that this group are likely to become “accidental renters” after a relationship break-up.
The Next Steps
If you are thinking about buying or renting a property, then we recommend you seek professional advice, so you can make a considered decision.
At REKA Property Management we give our clients the facts about the property industry.
If you want to rent quality affordable self-contained studios, rooms with ensuites, houses, flats and apartments in North, South, East and West London, then contact us on +44 (0) 203 286 6468 or email us at lettings@RekaProperty.co.uk.