At the beginning of 2018, experts were unsure as to what may happen to the UK rental market throughout the year. In 2017, property prices stagnated, and rental prices largely followed suit.
However, 59% of letting agents predicted rental rises in 2018. So is 2018 the best year to be a renter or landlord in the current climate?
Here are the stats you need to know for the UK rental market 2018.
The Statistics You Need To Know About The UK Rental Market 2018
“Generation Rent” is in full flow. Since 2013, average salary increase has risen just 7.5% while rents across the UK have jumped 9% on average. Tenants in the UK spend more than half of their income on renting a home.
In London, tenants pay 89% of their salary on renting a property, while tenants in the North East make their salary go further by handing over just 41% of their disposable income to landlords.
The average millennial will expect to pay more than £100,000 on rent before they buy their first home. With this in mind, it is no surprise that over 40% of young people believe they will never own a home and become lifetime renters
20% of landlords intend to sell or reduce the number of properties they rent out this year as it is becoming less profitable to be a landlord. This is because of;
Government tax changes
- Lack of mortgage interest tax relief for higher rate taxpayers
- Abolishment of ‘wear and tear’ tax allowance
- 3% stamp duty surcharge for people buying a second property.
Rents in the UK rose by 1.3% in July 2018 compared to the same month the previous year. Rents in London increased 3.3% in July. In the same month, Scotland saw an increase of 3.3%, Northern Ireland grew 4.5%, and Wales saw a decrease of -0.3% growth.
Average Rental Prices as of July 2018:
- UK £937
- Greater London £1,615
- Scotland £651
- Northern Ireland £653
- Wales £611. (https://homelet.co.uk/homelet-rental-index)
Inside the tenants’ minds – 33.5% of tenants plan to rent for between one to three years which 8% plan to rent for less than six months. 21.3% are long-term renters and plan to rent for longer than three years.
The average letting agent manages 185 properties per branch which dropped 8% in 2018 compared to 2017. Furthermore, RICS predict that more landlords will leave than join the rental sector in 2018.
ARLA Propertymark found that one in five tenants saw rents increase in January 2018 compared to just 16% in December.
What are tenants looking for?
Savills research found that tenants are understandably looking for the best properties at the best price. Tenants are typically willing to be flexible in location to achieve a better-quality property at a lower cost. Savills also found that demand for family houses is growing for those who want to be near the best schools.