It is irrefutable; the UK rental market is surging as once again demand outstrips supply. The many available indices all indicated that this isn’t just a London issue, as is usually the case, but rents are rapidly rising across the whole of the UK, anything from 6% to 25% increases over the last 12 months.
Why is this happening? It is the perfect storm created by the pandemic and Government interference in the rental market. Many ‘accidental’ landlords exited the market as their income was impacted by tax changes and increased legislation; AirBnB created an opportunity to earn more from the property asset than traditional rental; Covid staycation demand increased the number of landlords moving to holiday lets; prospective house buyers ‘tactically’ sold up during the Stamp Duty holiday and moved into rental so they could swiftly purchase when they find their perfect property and finally there is the seasonal demand, expected during the summer as students go to university, graduates start their new jobs and of course people relocate in time for their children to go to school.
Although we expect the demand to soften as winter draws in, the current situation is still creating massive challenges for our assignees and our Relocation Consultants. We have recently seen rental ‘gazumping’ (tenants who have agreed a deal with the landlord only to be dropped before the lease is signed because another tenant has offered a higher rent or better deal). In some areas of the UK like Bristol, Taunton, Bridgewater every rental property has 40 prospective tenants. Some Landlords and their agents are refusing Company Lets (we really do not know why!) or not agreeing to tenant break-clauses, not even a standard business break clause.
The result of these circumstances is that choice will be limited, offers must be made almost immediately after a viewing, tenancy negotiations are taking three times longer than they used to, there are more demands for holding deposits, and payment of rents and security deposits need to be paid ‘same day’. Some Letting Agents are only working 4-hour days because they can do their usual day’s work in half the time because properties are flying off the shelves so quickly!
We do warn our assignees of these issues and try to set their expectations. We work closely with our local area consultants so they develop closer ties with Letting Agents, to try and get first refusal on rental properties before they go on the market, but that is proving a harder taks when there is so much demand. We also make same day payments of holding deposits, first month rent and the security deposit to ‘lock in’ a deal. However, we will not compromise on unfair tenancy-lease terms and always seek to protect our clients and their assignees.
If you would like to know more about our services, please drop us an email and we will get back to you.
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