Walk into Reside during the winter months and you may see a member of staff huddled over a paperback. You would be forgiven for thinking that they were squeezing in a quick chapter of whatever blockbuster had been left for them under the tree on Christmas morning, but it is far more likely that they will be scrutinising Rightmove’s own festive treat: the Little Blue Book. Packed full of data gleaned from Rightmove during 2013, this tiny tome concisely summarises national property trends during the past 12 months. With the help of this and a brand new report on the private rental sector published by Knight Frank, this blog reviews 2013 and speculates whether 2014 will be a year of merriment or malcontent for Landlords.
Rightmove’s report indicates that demand for rental property has increased dramatically during 2013, with this put down to potential home owners being ‘unable to clear post-2008 deposit hurdles’. However, whilst trends over the last three years have seen the supply of new rental properties to the market dwindle, 2013 has bucked this trend and for the first time in years the gap between supply and demand has diminished. New investors are being tempted to the market by improving returns and a recovery in the sales market, as evidenced by a 29% increase in buy-to-let loans during the third quarter of 2013 compared with the same period during 2012. With this in mind, it seems that 2013 has been a year of real growth for the rental market – both in supply and demand, but is this likely to continue into 2014?
New research carried out by Knight Frank suggests that the 4 million households who currently live in privately rented accommodation in the UK will increase by more than 25% by the end of 2016. Even as the housing market starts to recover and Help to Buy lends a hand to purchasers with smaller deposits, the report speculates that Help to Buy ‘is unlikely to reverse the direction of travel to the private rented sector’. Knight Frank cite a strong likelihood that the scheme may be scaled back, and also the slim chance that the full £12.5 billion in mortgage guarantees offered will be used. The report concludes that this, allied with an economy gaining momentum and creating more demand for employment and therefore rental properties in urban areas, will see the demand in rental properties continue to increase for the foreseeable future.
Knight Frank and Rightmove’s findings are borne out by our own results at Reside, where we have seen the total number of lets agreed per year increase by 53% between 2011 and 2013. We have already felt the impact of the rise in tenant demand this year, as January 2014 was our busiest start to the year ever with the number of viewings carried out during the month up by 39% compared to January 2013.
With tenant demand continuing to increase at the same time as a small resurgence in the housing market, it seems that there has never been a better time to invest in rental property. If you are considering joining the ever-increasing number of investment landlords in or around Bath, or simply wish to keep up with our lettings news, please do not hesitate to follow us on Twitter, Facebook, or Google+. Alternatively, our office contact details can be found on our Contact Us page.