04/10/2021
Author : Maryanne Bowring
Why is the rental market shrinking?
This week Hamptons is predicting that by next year there could be 300,000 fewer rental homes in England than in 2016. New research from the agent blames rapid house price growth for reduced yields resulting in a level of landlord purchases that is below the numbers needed to replace the properties that are being sold.
Add to this the dash to list former AST rentals as holiday lets – more hassle but more financially lucrative while staycations remain in vogue – and the outlook for the supply of rental property looks bleak.
Hamptons figures show that the stock shortage in the private rented sector is three times as bad as in the sales market, with the number of homes to let down by a huge 46%. In 2021, they say, stock has been from 50% to 70% lower than in 2019 across every region of the country except London. With more than half of all homes advertised in recent months let within a week, it's no wonder that it’s so hard for people in many parts of the country to find a home.
So could build to rent step in and take up some of the slack? With schemes now increasingly being built out in smaller urban centres outside London, they certainly hold an appeal for renters looking for a high quality, low maintenance home with good amenities. Unfortunately, the sector is still small in comparison to the traditional BTL market, with BTR only accounting for 1-2% of all rental homes. So despite an estimated 50% more BTR homes being marketed this year than last, they won’t solve the problem.
Despite the expectation that rents will rise by an average of 2.5% in 2022 and yields forecast to grow, rising house prices make it unlikely that swathes of new landlords will come into the market in the near future. So sadly, Hamptons prediction that the private rented sector will be smaller in size by 2024 than it is today, looks likely to be proved correct.
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Mary-Anne Bowring FIRPM FRICS FARLA FCABE Founder/Head of Asset Management
Strategic partnerships, holistic delivery/ opportunities, growth, value engineering, thought leadership
Ian Barber MD BTR Mobilisation & Leasing
Runs HQ & site lease-up teams. Drives rent pricing, mobilisation, marketing, happy residents!
Jon Curtis MRICS Head of Building Engineering
Chartered Building Surveyor. Lectures on EWS1 & building safety. Runs CapEx programmes.
Kate Robinson MIRPM MD Blocks/FM Management (London Region)
Master plan setup, ops and staffing and resident engagement. ISO45001 champion.
Lee Harle Partner Ringley Law
Plot conveyancing. Debt litigation. Group Company Secretary.
Anthony Kingdon MIRPM AssocRICS MD Blocks/FM Management (North Region)
Stakeholder engagement. Mixed tenure specialist. Budget management. Plant audit, PPM compliance.
Chris Georgalis MRICS Head of Commercial Valuation
Chartered Valuer. Rental valuations: retail, leisure. IRR modelling and valuations for secured lending. Compulsory purchase & rent reviews
Nichola Pughe MRICS Head of Residential Valuation
Chartered Valuer. Rental development & mixed use valuations, IRR modelling. Leasehold enfranchisement specialist
Libby Chen MSc Compliance Manager
Operational Plant & Equipment strategy PPM Compliance lead, Asset tagging Client major projects
Dipesh Parekh Director PlanetRent
Customer centric, vertically integrated PropTech/fin-tech solutions.
Leana Aristodemou MIRPM MARLA AssocRICS Strategic lead: ESG & Asset Business Plan delivery
Financial modelling, valuation analyst to support underwriting & fund reporting.
Natalie Birmingham Helpdesk Support Manager
Trainer & Helpdesk Manager: people, systems,contractors. ISO45001 supply chain accreditation.
Steve Norman Planning Director
Land due diligence (opportunities & constraints) Has contributed to a number of award winning schemes.
