Rental market overview

According to the latest government’s English Housing Survey, 82% of private tenants are satisfied with their accommodation, compared with just 74% of those in properties owned by councils or housing associations.

The survey also shows that 76% of private renters were satisfied with the services provided by their landlord, compared with 64% of social sector tenants. The survey covers the period from 2022-2023.

Property availability

During July 2024 there were 358 properties advertised to let across the areas that we work in. This was an 10% increase from those advertised in July 23 and a 14% increase from June 2024.

141 properties were let in the month which is a slight reduction of 9% compared with last year. This is something we shall now be tracking as it could mean that rents have hit the top limit, and salaries are not keeping abreast with rental expectations. This means that affordability still is coming out as the main factor in people not being able to take on a new property even though there are more people in the market.

In July we marketed an average of 9 properties a week and received 819 enquires which compared with last month is a 60% drop (normal for the time of year) but very much on par with last year with a 57% increase for enquires on roughly the same number of properties! As per recent months we found that only 27% of enquires translated into people actively looking for a property.

For those properties checking-in in July, it took an average of 7 days to find a new resident on an average rental of £1,000 and below; 11 days on an average rental of £1,001 – £1,500; and 39 days on an average rental of £ 1,501- £2,500. This means that up to £1,500 per month turn around for finding a tenant is reducing but anything over £1,500 is slowing down. As we deal in averages the overall result for July means that we have increased from an average of 12 days to 16.

Rental comparisons for PE27, PE28, PE29, CB23 and CB24

You know we love a database and by having this type of detail we are best placed to give you the right guidance when looking at rental reviews and when you are considering extending your portfolio.

These average figures come from our records. Therefore, they are a mixture of the rent reviews that have been put in place over the last year. Plus, the rental figure achieved at the point of remarketing, and are split by the number of bedrooms.

Nationally the Goodlord rental index showed that the average cost of renting a property in England is now £1,470. This is up by 7.5% year-on-year, surging past what some market observers believed could be the ‘ceiling’ on rental costs set last summer.

This time last year, in July 2023, the average price of a rental property in England was £1,367. At the time, July’s figure was the highest ever rental average recorded by the Index – a record that has held until now.

Which areas have the highest year on year increase by number of bedrooms?

The year-on-year rental has shown that PE27 remains the best performing rental for 1 bed homes. 2 bed homes have shown the better performance in CB24 with 3 bed homes performing better in CB23.

The average increase over the area is still around the 8% mark. Again, the main driver of these increases is down to mortgage rate rises and although the supply has increased we are still seeing and average of 24 people actively applying for each property. We also seeing landlords with long term residents who historically have kept rents lower than market rate now asking for an increase to market rate or in some cases higher than market rate as their mortgage has increased.

Has prospective tenants’ behaviour changed?

No change here from recent months – yes behaviour continues to change given the competition to find a new home.

From the figures above you can see that we are talking to more first-time enquires than ever before. Therefore, before we call any prospective applicant, we would need them to complete a pre-registration form which askes a number of basic questions including salary level and when do they want to move.

One element that has raised its head this month is fall outs. This is where an applicant agrees to take a property the reference has been carried out but they pull out before we move them in as they have found another property.

However, we are still finding that affordability is very much coming into play. Due to lack of supply prospective tenants are having to spend more than 30% of the household income on rent.

Sadly, fraud/bending the truth continues to be an issue we have to deal with. We are now finding that prospective tenants are doctoring bank statements and inventing job histories to improve their chances of being accepted as a new tenant. That is why we continue to be very vigilant asking the same questions throughout the initial conversation, viewing and referencing process. Once we find a contradiction in the information given that’s our trigger to go into more details!

What return can I expect?

As I have said many times before this is very much down to when you bought the property.

In this market the average gross rental yield that you should expect is anything between 5 – 6%.

If you are considering extending your portfolio why not book in a call with me to discuss the off market opportunities we have available.