Rental Market Update – February 2024

We’re always looking ahead to what the future holds for the rental market. Across the last couple of years, we’ve seen demand for rental properties soar and the supply has struggled to keep up. The disparity between the number of renters in the market and the number of homes available highlighted the need for more long-term rental properties. This is exactly where build-to-rent (BTR) can have a huge impact, and one of the areas where we can actively try to make a difference.

BUYING VS RENTING

In today’s property market, renting is making more and more sense. It’s not just about the smaller upfront cost – the real beauty of renting is the freedom and flexibility it gives customers, which allows them to choose their home to match their lifestyle. Our Simple Life properties are made for long-term living, so you can put down roots or branch out when you’re ready. In our customer satisfaction survey Data from last year, 80% of people renewing saw themselves staying a further 3 or more years. It’s easy to see why; with maintenance costs covered by your landlord, there’s no need to worry about a leaky roof or broken boiler. Not to mention, when you factor in recent interest rates, monthly mortgage payments can end up more expensive than the cost of rent.

RENTERS REFORM BILL

Looking further down the line in 2024, there’s a chance that the Renters Reform Bill could become law before the end of the year. If that happens, tenants can look forward to plenty of new protections coming their way. While we pride ourselves on what we offer, the bill is set to protect residents against private landlords who may offer inflated rents for a sub-standard property and service. The key reforms for tenants include new regulations to limit how often rents can be increased, extend notice periods for rent increases, introduce a new ombudsman to quickly resolve disputes and bring in plans to lift all bans on pets. The future is looking bright for tenants, with the whole process of renting a home being made easier and more transparent.

THE BTR BOOM CONTINUES

Build-to-rent is one part of the UK rental market that continues to evolve. It’s the fastest growing sub-sector, with increased investment into the single family housing sector, and it looks to be showing no signs of slowing down throughout 2024. According to the British Property Federation, BTR is set to expand by a whopping 11% year-on-year. It continues to improve and raise the standard of renting, while also showing plenty of resilience against the challenges of the wider market. We’re expecting the sector to continue growing, driven by rising mortgages and a growing demand for flexible and convenient living.

DEALING WITH THE DEMAND

An uptick in supply means it’s likely the demand for rental homes will fall back gradually this year. We saw a record number of BTR homes under construction in 2023, and we know that continuing to deliver new homes is the most direct and effective way to address the housing shortage. So that’s exactly what we’re doing in 2024. We’re committed to delivering high-quality properties and services across the UK.