In a recent survey conducted by flatfair, a prominent deposit alternative service within the industry, more than 61% of respondents identified rent and deposit size as the foremost considerations when evaluating potential rental properties. The findings, although unsurprising, shed light on the evolving preferences of tenants in the current market.
Parking space emerged as the second most crucial factor, garnering 22.2% of respondents’ preferences, while a fully furnished property secured the third spot with 16.6%. Gary Wright, the Chief Executive of flatfair, emphasized the significance of accommodating tenants’ desires for reduced upfront costs in light of prevailing market conditions.
This survey coincides with the release of HomeLet’s rental index, which reports marginal declines in rents for the second consecutive month, registering a 0.9% decrease. Across all regions of the UK, excluding the East Midlands where a 0.3% increase was observed, monthly rental prices have experienced declines, some for the second successive month. Notably, the capital witnessed a 2.2% decline.
Despite these recent dips, HomeLet underscores the broader context of a substantial 8.01% increase in rental prices over the past year, reaching a staggering 19.6% surge since 2021—an equivalent of over £200 per month for the average tenant. In specific regions like Scotland and Greater London, these figures soar to 23.4% and 21.4%, respectively.
HomeLet’s analysis reveals tenants now allocate 33.4% of their monthly wages to rental costs, marking a 2% uptick from the previous year. The situation is more pronounced in Northern Ireland, where the concern deepens with a 10.7% year-on-year increase, bringing the proportion of monthly wages devoted to rent to 38.1%.
Andy Halstead, CEO of HomeLet & Let Alliance, notes, “January is a opportune time for us to reflect on the past year with our HomeLet Rental Index and make predictions for 2024.” Despite the minor decrease in monthly costs for two consecutive months, Halstead anticipates continued challenges for landlords, including limited housing stock, escalating costs, and exorbitant buy-to-let mortgage rates.
Halstead concludes, “Unless we witness dramatic changes, 2024 is poised to bring more of the same. With factors such as high inflation and financial crises looming, a return to pre-Covid-19 rental rates seems unlikely. By 2025, we estimate rent increases of 5-10% will not be surprising, given the broader economic landscape and management of British finances.”