Tenants are looking to stay in their rented properties for increasingly longer periods of time, according to Propertymark.
Given the increase in rental prices and lack of stock available, more tenants are choosing to extend their current tenancy agreements beyond their initial term, the March Private Rented Sector Report shows.
The data collected from Propertymark’s members continues to indicate signs of ongoing disparity in supply and demand and this trend looks set to continue for the foreseeable future.
An average member branch reported having just eight properties that were empty and freely available in March, although this figure has improved since February’s figure of five.
An average of 93 new applicants were registered per member branch in March which has increased significantly compared to 78 per branch recorded in February.
The UK average number of landlords that withdrew their properties in order to sell them stood at three per member branch in March which is an increase from two in February.
Some 71% of member agents reported rent prices increasing which is a slight decrease from 74% in February but is still significantly higher than the same time last year which stood at 60%.
Nathan Emerson, CEO of Propertymark, commented: “Our latest report shows that tenants are staying in properties longer. This is in part due to rock bottom levels of stock meaning tenants have very little choice when looking to move. They will also find fierce competition is pushing up prices of what is available often making it unaffordable to move.
“When an increase in tenants staying put for longer occurs, the churn of properties that would normally come back into the market begins to stagnate, feeding the issue further. Agents have been warning of the adverse effects of landlords leaving what they feel to be a hostile market. Property investment, like any form of investment, needs to be financially viable and with adequate risk mitigation. Many landlords feel their rights are being eroded, meaning they are more likely to sell.”
No kidding Sherlock, so what’s the answer?
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As house prices rise, more people cannot afford to buy. So rental demand increases. Then there is the drip,drip of decent landlords leaving the PRS as measures intended to curb the rogue landlords (which will have no effect on the rogues who by definition do not obey the rules) start to bite. As demand increases and supply shrinks and landlord costs increase new rents will rise. You don’t have to be a genius to work this out, although it seems to be beyond the wit of the Government, Shelter and Generation rent. If a tenant is good they will have little to fear from a good PRS landlord (unless the landlord needs to sell up to retire or has some life emergency of their own that compels them to sell). Luckily (touch wood) our current tenants are fine, and have been in place between 4-8 years. Our properties are decent and properly maintained, we like to think, and we very rarely impose a rent rise even though our rents now are all at least about 20% below current open market rent. I expect a lot of my vilified fellow PRS landlords are in the same position, as better the good tenant you know than potentially bad one you don’t. I expect the prospect of having to pay more rent to move is also a factor in tenant mobility.
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