The Rental Tide is High & We’re Riding a Rental Wave
Mollie Swallow, Director and Head of Lettings at Lurot Brand offers a current lettings market update:
“2023 started strongly and these early months have been nothing but positive for our lettings business.”
Record clicks and rental prices
Activity across our website and the property portals has seen big increases in click rates and the volume of enquiries we’ve received has risen significantly. Recent data provided by Rightmove indicated that since the pandemic, the private rental sector has said goodbye to 25% of lettings stock, despite the level of rental enquiries remaining constant. Not surprisingly, this consistent demand for more rental stock has triggered a spike in rents, which is even more apparent at the lower end of the rental market and at the £1000 per week level. Not since 2015-16, have we witnessed this kind of surge, and recently we’ve seen even this overtaken. A recent triumph was a price increase of 34% compared with anything the landlord had ever achieved before.
The magic number is £1000 per week
As I said, the very buoyant sector of the market is £1000pw and under; although it is definitely true that we are receiving a robust number of serious enquiries for £1000-2000pw houses. At the higher end of this range or above £2000 per week, the demand is less busy, but seasonally this is very typical and as we’d expect.
How is it looking for the coming spring?
So much activity, the question – is this sustainable must be on every letting agent, landlord and tenant’s lips. There’s little doubt that heading into spring the residential sales market is becoming slightly quieter compared with 2022. But as far as rentals goes, it’s riding the crest of a rental demand wave. With a lot of mews houses being secondary homes, our niche market can often see our stock levels as a percentage compared to other agencies always remain in the much higher bracket. If there is a slight dip in the sales market, lettings can come in and rent our vendors’ homes for a year or two, while the sales market begins to stabilise itself again; we see this play out more and more often. Rather than letting your house sit empty, you can achieve a great yield and capitalise on your asset whilst also marketing for sale at the same time.
Tip for landlord’s pricing
Once spring and summer come into the picture, we will most definitely see an increase at this end of the market and strong interest from prospective serious tenants. Typically, this is the period when companies begin to move employees and their families overseas and therefore, relocation becomes far busier.
At the moment, this sector of the market is much more price sensitive. Based on this, my professional advice would be to factor this in when it comes to pricing correctly; by remaining in tune with the current rental market, try not to overreach on price and you will avoid a void period.