The country rentals market features less frustration than for a long time because most of those in it, want to be there.
Cutting to the chase, having seen rents increase barely in line with inflation last year, we are seeing above inflation rises now, especially in those areas which experienced the biggest falls over recent years. Renewal levels are high and increases of below 3% less common than those above 5%. Instances are growing of newly renovated, high quality new lets achieving much more. All good reasons for landlords, after a long fallow period, to be cheerful, yet tenants, overall, are happier, too. This is mainly because far more of them, are there by choice.
The last decade saw both financial turmoil and financial ‘stasis’, as sluggish property markets, higher credit barriers, and decreases in real wages conspired to force some who couldn't sell, to let and many who couldn’t buy, to rent. Circumstances created “accidental landlords” and begrudging tenants. They also prompted many investors whose savings were generating near zero income to try their hand at being a landlord, instead.
The last two years have seen this position shift markedly. As noted elsewhere, affordability for first time buyers is higher than ten years ago in all areas bar the south east. As a direct result, the English Housing Survey reports that, “After more than a decade of decline, the proportion of 25-34 year olds in owner occupation has increased” and that as many are now owner-occupiers, as are private sector tenants. From our perspective, this means far fewer instances of tenants complaining that credit restrictions are stopping them from buying, for less than the cost of renting. Similarly, greater equilibrium in the sales market has long since enabled accidental landlords to sell, whilst tougher regulation and higher taxes have prompted so-called ‘amateur’ landlords, to either get professional, or get out.
Most of those now in the market, want to be here. This now routinely includes families renting in a new area before they buy and, increasingly, downsizing retirees who want to release equity and be free of any maintenance concerns. This supports our view that, having emerged from almost nothing twenty years ago, the country rental market is maturing to the point at which it is contributing significantly to the functioning of the residential market, overall.
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