Rental Market Update - November 2023

03 November 2023

As of November 2023 the current rental market is known to have a persistent imbalance of low supply and high demand.

The current market

The current rental market is known to have a persistent imbalance of low supply and high demand. Rightmove have reported that the average rental property across Britain receives 25 enquiries from tenants to letting agents. Increasing the availability of rental properties is the most effective and sustainable approach to curb rental price growth. However, there is a decline in both home construction and new investments by private landlords, and this trend is expected to persist until 2024 due to the impact of rising borrowing costs and the aggressive tax situation around rental properties.

EPC rating

Despite a generally high level of compliance among landlords, the proposed regulation that would have required rental properties to attain a minimum EPC rating of C for new tenancies by 2025 and for all properties by 2028 has recently been abandoned. This change in policy is expected to alleviate some of the pressures that landlords have been facing and may contribute to making the prospect of becoming a first-time landlord more appealing.

Rising rents

Many existing renters are inclined to stay put to avoid the hassle and cost of relocating to a place with higher rent, which further constrains the available supply of rental properties. Despite an acceleration in UK earnings growth, the increase in rental prices for new leases continues to outpace it, exacerbating the issue of rental affordability.  With the lack of new rental properties, landlords selling up and tenants moving less frequency, this trend is unlikely to change soon, meaning that we can expect to see rents continuing to rise.