With a full dataset from 2021 now widely available, industry watchers, estates and lettings agents from across the UK have had a chance to review and are commentating on the state of the property sales and lettings markets.
Looking at lettings specifically, it has obviously been a choppy ride for landlords and tenants alike through the last two years of the pandemic. With restrictions on moving, working from home directives, and interventions in the ability of landlords to receive rent and also to gain possession of properties, impact on landlord sentiment has been particularly hit. Early on in the pandemic we saw an increase in voids and rental stock availability and a consequence reduction in average rents. However, with the reopening and stimulation of the property market through 2021 in particular, this picture has been reversed. Smaller landlords it appears have taken the opportunity to exit the market altogether, as average house prices have risen dramatically due to pent up demand, tax breaks and good old background supply and demand issues which have not receeded.
Whilst some of these rental properties have been bought up by larger more established landlords, a disproportionate number have circulated back into owner occupation. The consequence of this is that up and down the country, available rental stock is now at an all time low: and rents have been on the rise. Rents have risen by 17% on average throughout 2021.
We believe this pattern will continue through 2022 and beyond. A combination of years of increased legislation and regulation of the sector, coupled with increased costs, dropping rental yields, low supply and high demand, and rents having been held comparatively low (in real terms) for years, has created a ‘perfect storm’ in the sector. Watch this space.
