What Does 2019 Hold in Store for the UK Rental Market?
We’re at that time of year where we take stock of the past 12 months and look ahead to the next 12. No one can predict the future with 100% accuracy, particularly in a fast-moving political environment, but we can certainly have a guess at what 2019 holds in store for the UK rental market.
There are pieces of potential legislation on the way through parliament that will affect landlords and letting agents, but there are also trends that may take the sector in an exciting direction and which will benefit those who rent out properties. Take a look at these potential outcomes for the UK rental market in 2019.
1) Bigger Rents Are More Affordable in 2019
This may seem like the holy grail for lettings agents and landlords. The idea that tenants are finding it more affordable to rent, but are simultaneously paying more than they were a year ago is almost too good to be true. It is certainly a win-win and is the situation we find ourselves in as we head into 2019.
Affordability is important in the industry. If renters feel their monthly outgoings are more affordable, they are less likely to keep looking for another, cheaper home and are more willing to commit themselves to your property in the longer term. Recent rental index data shows that wages are rising faster than rents, meaning tenants are paying out a lower percentage of their monthly wage on accommodation.
Remarkably though, rents are also rising substantially and benefiting landlords accordingly. During 2018, rents in the UK rose by 1.03%, whilst gross monthly pay shot up after years of stagnation. This trend shows that 2019 will start with happy landlords and contented tenants. Truly that is a Christmas miracle.
2) A Limit to Tenants’ Security Deposits
The government is keen to pass the Tenant Fees Bill, which is widely seen as an attempt to woo ‘Generation Rent’ in time for the next election. All major parties have highlighted the country’s growing renting population as a key target after decades of chasing after homeowners.
Initially, the proposal was for there to be a limit of four weeks’ rent when it comes to setting a security deposit. However, the National Landlords Association (NLA) campaigned to have this boosted to six weeks. The government initially agreed, but then changed their minds and plumped for five weeks instead.
The average deposit currently constitutes 4.8 weeks, so this won’t affect a large number of landlords if it becomes law in 2019, but the NLA is worried about the lack of flexibility in the system. It has voiced concerns that landlords will have to turn away higher risk renters (those with pets or poor credit ratings, for example), leading to a scarcity of potential accommodation for them.
3) Changes to Charges
As part of the same bill, there will only be two occasions on which a landlord can take default fees when a tenant is at fault in the UK rental market in 2019. They are if the tenant has lost a key or other security device, or if they are two or more weeks late with their rent.
It will still be possible to charge a tenant for other damages, but landlords will have to claim against the them or the deposit in court if the tenant refuses to pay. If you want help keeping up with the latest legislation, including the new landlord rules from 2018, then outsourcing your property management to Executive Property Management Solutions is a smart move. We are on top of the latest developments, are experts at drawing up tenancy agreements and pride ourselves on cultivating a great relationship with the tenants of the properties that we manage.
4) Youthful Populations Boosting Big Cities
There is, of course, a lot of uncertainty surrounding what happens when (or if) the UK leaves the EU in March, but one trend that looks set to stick around is the rush of the country’s youth population to major cities. This prediction for the UK rental market in 2019 is great news if you own property in one of these hot spots.
More demand from those who want to be close to the action pushes rental prices up and means that it’s much less challenging to fill your property. London, Leeds, Birmingham, Manchester, Liverpool and many others are all experiencing this influx and that can only be good for landlords.
Need Help in the UK Rental Market in 2019?
If you want a hand managing your properties in 2019, Executive Property Management Solutions can offer a bespoke service that takes the tasks you don’t have time to complete off your hands. Speak to us today to find out how we can make your business run more efficiently in 2019. Call 0208 5757630.
