It’s refreshing to be able to report on positive news for landlords and tenants from the mainstream press, as it can often feel as though the vast majority of the time the focus is on negatives about the Private Rented Sector, or PRS.
In fact, it’s something that we try to write about as much as possible. That whilst the proportion of people renting increases, there should be more done to address the lack of supply, and more done to encourage more landlords and investors into the property market to provide these homes.
It’s been a hard and tough 18 months for everybody, but one thing that can be said is that landlords and tenants were able to get through relatively well within the context, mainly through a raft of government measures which included controls for evictions, and the introduction of the furlough scheme to allow tenants to keep up with rent payments, as well as supporting landlords through self employment and business grants.
Too often before 2020 the focus was on an obsession with younger people being homeowners, and the cost of entering the market, however, with the rental market now thriving, this appears to be changing.
Renting now cheaper
This shift appears to be reflected in new research that’s been released by Hampton’s, and reported in Landlord Today, suggesting that renting is now cheaper than paying for a mortgage.
According to the article, “In May the average tenant in Britain spent £71 per month less in rent than if they were servicing the repayments on a 90 per cent loan-to-value mortgage on the same home.
This means they would have spent a monthly average of £1,054 on rent compared to £1,125 on mortgage repayments.
This is a switch-around to the position just before the pandemic. In March 2020 a buyer with a 10 per cent deposit would have been £102 per month better off buying.”
This marks a fairly remarkable turnaround, and it appears that through more landlords and investors coming into the market, that the issue with supply is starting to be addressed, meaning that more tenants are able to get into PRS accommodation.
This heralds good news for property investors, too, as property prices have continued to increase and with them, rental yields too.
Although the supply issue appears to be easing, that’s absolutely not to say it’s anywhere where it needs to be and that means that many landlords are still finding that they’re having a lot more demand for their properties.
There’s also what appears to be a pronounced increase in demand from the post-pandemic lifting of restrictions, with no sign that private renters are slowing down in their search for housing.
It’s likely going to be a very good year for landlords and investors if these trends continue, and it would also appear that it’s likely to continue through into 2022 and beyond.
As with many other landlords, the consensus now appears to be for investors to expand their portfolio whilst the market is in such a robust place, however, you may need to be quick, as competition is fierce.