In its most recent rental market snapshot, Rightmove has unveiled startling figures showing that 16 per cent of properties currently listed for sale were once available for rent. This percentage marks a notable increase from 13 per cent recorded before the pandemic hit. The data presented in the report also sheds light on the mounting challenges faced by landlords in the current market landscape.
Rightmove’s comprehensive sentiment survey, which gauged the opinions of landlords, underscores the multiple pressures they are grappling with. Top concerns among landlords include the government’s stance towards the industry, escalating taxation, and the ever-mounting compliance requirements. An additional quarter of landlords are troubled by the soaring costs associated with buy-to-let mortgages.
The survey highlights a particular focus on properties with lower Energy Performance Certificate (EPC) ratings, as landlords brace themselves for the proposed changes to EPC requirements from the government. An alarming 33 per cent of landlords who own properties with lower EPC ratings revealed their plans to sell these properties rather than undertake improvements to raise their EPC rating. This figure stands in stark contrast to the 20 per cent who expressed similar intentions in the previous year.
Notwithstanding the challenges they face, landlords continue to place immense value on retaining reliable tenants. The survey reveals that a majority of landlords (57 per cent) report that tenants choose to stay in their properties for longer than 24 months. Only a small minority (eight per cent) stated that their tenants stay for a year or less.
Meanwhile, the rental market outside of London is experiencing a significant surge in average asking rents, reaching a new record of £1,231 per calendar month this quarter. Despite the rapid increase in rental prices, properties are being snapped up swiftly, and landlords continue to encounter long queues of prospective tenants eager to view and secure their desired rental homes.
According to the report, the average time taken to find a tenant for a rental property has reached its quickest since November 2022, standing at just 17 days. The demand from tenants has also surpassed the frenzied levels seen last year, currently standing three per cent higher than at the same time in 2022 and a remarkable 42 per cent higher than June 2019.
While there is a glimmer of hope in terms of increased rental properties availability, which has risen by seven per cent compared to June 2022, it is important to note that this figure remains 42 per cent below the levels recorded in 2019, signifying a persistent gap between supply and demand in the rental market.
In conclusion, the rental property landscape has seen significant shifts, with a growing number of properties transitioning from the rental market to the sales market. Landlords face an array of challenges, ranging from government policies to financial constraints, but they remain resolute in their commitment to retaining good tenants. As rental demand continues to outpace supply, the market remains highly competitive, offering opportunities and challenges for both tenants and landlords alike.