Low supply and rising prices in properties for sale across the UK means we are seeing more lets than purchases for the first time since the 1930s.
With homebuyers struggling to find properties they can afford, and having to find bigger deposits, more and more are turning to the lettings market as a more affordable solution.
Johnny Morris, research director at Countrywide, said: “As some would-be buyers and sellers sit on their hands, Brexit-induced uncertainty has continued to boost the rental market. September saw record activity, with increasing numbers of lets agreed and tenants choosing to renew their contracts. On current trends, 2017 could be the first time since the 1930s that more homes are let than sold.”
Currently at their lowest levels in 30 years’ homeownership has continued to decline since the beginning of this year. Even with mortgage rates becoming increasingly more affordable, the number of homes coming to market remains low, resulting in prices continually rising.
The industry did see a rise in sales back in march as landlords rushed to purchase property before the rise in stamp duty, however this has simply reduced the supply of property for sale and increased the number of rental properties available.
“The shift between the number of properties being offered for rent and sale has been a long-term trend, boosted a bit by stamp duty and a bit by the Brexit vote,”
As well as the shift in markets, we are also seeing the pricing gap for rental property between the North and South narrowing. Rental prices across more Northern cities increased at three times the rate of Southern regions over the past year, with hikes of 6.4% in the North compared to just 1.8% in the South according to a recent Rightmove report.
“A different type of two speed rental market is emerging, with falling stock and growing demand driving rental growth in many Northern cities at a higher rate than those in the South.”
Those looking to rent a home in Manchester have seen the biggest hikes during the past year, with rents rising by an average of 7.1%, followed by those in York and Leeds at 6.8% and 6.6% respectively.