The Rental Market Report for Q1 has been released by Hometrack this week and the data shows that UK rental growth outside London has hit a 4-year high after a 3% annual increase. Some of the other key takeaways from this report are:
- Rental demand is building in city centres as lockdown eases and offices start to reopen
- The new supply of property coming to the market outside London was 5% lower than in Q1 last year
- Rental demand was 59% higher in April than in a typical April in the more ‘normal’ markets between 2017 and 2019
- Rental demand has also started to climb in inner London, up 6.5% since Easter compared to the previous six weeks.
The rental market is strong and, in general, is experiencing the same issues as the sales market which is low supply and high demand. It is positive to see that demand is picking back up in city centres as lockdown measures ease and since Easter (April 5th), tenant demand has risen sharply in central Edinburgh, up 26%, central Leeds has rental demand up 7%, while in Manchester demand is up 5%. If you look back over our previous podcasts and weekly newsletters, this is something that we had suggested would happen once lockdown eases and we get back to normality.
Now, let’s take a look at the headlines that caught our attention this week, I always try to summarise the links to save you having to click through.
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- Renter eviction ban to finish at end of May – The ban on evictions enforced by bailiffs in England was brought in during the coronavirus pandemic and will come to an end on 31st May. Eviction notice periods, which were previously extended to six months as an emergency measure during the pandemic, will be set at four months from June 1st and they plan to return the pre-pandemic period of 2 months from October 1st. Alicia Kennedy, director of Generation Rent, has called on the government to introduce a Covid “rent debt fund”, to allow tenants to clear debts and landlords to claim for lost income as there is fear of increased homelessness that households may face which can only be helped by financial support for both tenants and landlords that face financial arrears brought on by the pandemic
- New ‘lifetime deposits plan for renters – In the Queen’s speech this week, it was announced that the ‘lifetime’ deposits initiative for renters will be among a raft of measures to reform the renting sector. This was something that the Conservative Party had promised to bring in ahead of the last general election. The new Lifetime Deposit scheme will allow renters to transfer their deposit from one property to another instead of being left out of pocket for weeks while they wait to be reimbursed from their old landlord but have to spend money securing their new property. In theory, this scheme will be helpful but the practicality of it remains to be outlined as you have to consider circumstances such as money being deducted from rental deposits to cover damages, repairs etc when a tenant vacates the property and how this would all work.
- Commonhold Council Launched – As part of the biggest reforms to English property law for 40 years, Housing Secretary Robert Jenrick has launched the Commonhold Council which is an advisory panel of leasehold groups and industry experts who will inform the government on the future of commonhold which is a collective form of home ownership. The commonhold model is used widely around the world and provides a structure for homeowners to collectively own the building their flat is in, with a greater say on their building’s management, shared facilities and related costs. There are no hidden costs or charges, preventing some of the bad practices currently seen in some leaseholds. These changes should make the leasehold system fairer, cheaper and simpler.
- UK house prices increase at fastest rate in five years – This comes from the latest house price index report produced by Britains biggest mortgage lender, Halifax. The monthly snapshot of the property market from Halifax showed a 1.4% jump in the cost of a home in April, taking the average selling price to a record high of just over £258,000. Halifax said that circa £20,000 had been added to the average house price since April 2020 when the first coronavirus lockdown hit. They forecast that the recent levels of activity should continue in the coming months even when the stamp duty holiday starts fading. This will be down to low stock levels, low interest rates and continued demand which will continue to underpin property prices.
That is all we have for you this week. If you have any comments or questions on this week’s news summary then please feel free to send us an email at [email protected] – if not, see you next week.