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Summer season- holiday’s, ice cream, socks’n’sandals, and the prime time to get your property up for let, right? Well, anyone who’s been trying to find a tenant this summer might have found things have been a little different, with the market slowing to a sluggish pace, and potential tenants tricky to track down.
But why is this, and more importantly, is it going to continue? Well, recent data released this week by Homelet suggests that we’re not looking at an upturn anytime soon, and unfortunately this slowing down is starting to have an impact on the rental rates across the UK.
So, what’s going on?
The data revealed that UK rental prices fell by 0.3% in June 2017 compared to the same period in 2016, with the average figure now prices at £908 a month. Rates in London dropped even more dramatically, falling by 2.6% this year compared to last.
The average monthly rates across the UK are now:
|Region||June '17||May '17||June '16||Monthly Variance||Annual Variance|
|East of England||£906||£909||£907||-0.4%||-0.1|
|Yorkshire & Humberside||£615||£614||£621||0.2%||-0.9%|
|UK including Greater London||£908||£901||£910||0.7%||-0.3%|
|UK excluding Greater London||£757||£753||£753||0.5%|
Why is this happening?
The snap election has thrown everything into disarray. Last year, landlords had the upheaval of Brexit to contend with, whilst this year the mass confusion around who’s running the country seems to have put the brakes on the market.
With so much in the press about the abolition of tenant’s fees, it is also highly likely that many tenants are hedging their bets and sitting tight, with a view to moving when the changes come into force. The press are being very vocal about the changes that are planned, however nobody can offer any details about the projected timeframes, leaving many people very confused as to exactly when they will be able to move without incurring potentially hefty fees. It is a fair assumption to think that many tenants are expecting these changes within a few months, so are sitting tight and enjoying the summer, before planning a fee-free move in the Autumn.
The picture also spreads to house price growth, with the rate of growth at it’s lowest level since the aftermath of the Brexit vote. This is in direct contrast to what we would expect to see after an election, as historically a period of string growth follows, with buyers buoyed by the ideal of a ‘strong and stable’ leader.
The amount of properties added to the market (according to research from the Royal Institute of Chartered Surveyors) slipped to a new record low, dropping back to figures in line with 1978. Transaction levels fell for the fourth month in a row, suggesting that not only is there no property for sale, but also that buyers are as nervous as potential tenants to make any moves before they are more confident about what the future holds.
Is there anything I can do?
Keep your eyes open: Be aware of the rates that other properties in your area are being advertised for, and keep an eye on which ones are moving quickly. Price your property to fall in line with the local market, so you don’t stick out like a sore thumb.
Mind the gap: In an uncertain market, it is important to be aware of the balance between maintaining an average rent, and minimising void periods. Many landlords plan to increase rent with ever new tenancy, however in this current climate it might be wise to consider maintaining the current rent rate to avoid potential void periods. After all, there’s no point increasing a £900 rent by £50 a month if it means the property will be sat empty for a further month, loosing you £900, and only gaining you £600!
Stay positive: Regardless of political uncertainties, people will always be looking for new homes. The world doesn’t stop turning because Westminster is at loggerheads! As the political landscape settles into something more resilient, there is no doubt that the market will gather pace, and there’ll be plenty of tenants relying on you to be ready for it!