The rental property crisis has hit the UK’s capital city, where rents have increased at a rate twice that of wages over the last decade. This means that tenants now face paying higher costs to live in their homes.
In England and Wales, residential rents grew by 3.3% in real terms in the 12 months to August 2022, compared to 2.4% growth in average weekly earnings (wages). While some landlords are offering rent reductions or even free accommodation in order to attract new tenants, others are raising rents.
This increase in cost pressure is already affecting both private renters and homeowners who rely on renting out their properties. According to research from the National Landlords Association, around 85,000 households are being pushed into homelessness every year due to the rise in housing costs.
Current state of the UK property market
The UK property market has been stagnant for some time now, which is largely due to the rise in the minimum wage and higher taxes on properties. However, prices are still rising at a slow pace, but they do seem to be stabilizing. Property prices are expected to increase by 1.9% until this year.
Currently, renting a house in London is more tedious than job seeking. According to several property search specialists, real estate agents, and renters, an insane scramble over existing rentals ensued from workers and students flocking back to London after the pandemic. Unfortunately, the supply has not been enough to meet the surging demand. As a result, the prices of housing rents have soared to a record high.
SpareRoom, a leading roommate search site in the UK, reports that the average monthly price of a shared apartment soared to approximately ₤930 (which is equivalent to $1,109) as of October 2022. The decrease in supply of rentals puts many people in a desperate situation whereby you are forced to pay more and, in certain circumstances, without even viewing the house.
What’s good in renting a property in UK
In case you are thinking about moving to UK, then it’s better for you to consider renting rather than buying. There are countless benefits associated with renting properties in the UK.
First of all, the cost of living is significantly lower than in comparable cities such as New York and San Francisco. Secondly, given the housing shortage in London, it’s highly unlikely that you’ll ever be able to afford to buy a house in the near future. Thirdly, as long as you’re qualified to work remotely, renting a property in London will allow you to cut back on commuting costs. Fourthly, there are few restrictions placed on landlords, unlike their counterparts in the US. Fiftly, rental properties are cleaned regularly. Many landlords use professional cleaning agencies and adopt same day rubbish removal to ensure tidiness at all times. Finally, the process of finding and applying for a rental property in London is extremely straightforward. As a matter of fact, most landlords prefer to deal directly with tenants.
Why property management in rental market matters during crisis
It goes without saying that any landlord who manages his or her portfolio of properties should be aware of the rental market conditions. But why does managing a property matter in such turbulent times?
For starters, even though the overall cost of buying a property remains relatively cheap, tenants are increasingly demanding larger deposits, which means landlords need to find ways to raise cash quickly. And if they want to avoid having to put their property back on the market after taking out a short term loan, they may opt for a tenant buyout instead.
Another reason why property management matters is because it helps to ensure that your tenant base stays loyal. After all, the bigger the gap between a tenant’s expectations and reality, the greater chance he or she has of defecting. To prevent this, you should always monitor your properties closely – check whether appliances work properly, for instance, or look out for signs of wear and tear.
Moreover, managing a property allows you to save on costs. For instance, when you use a professional property management firm, you’ll no longer have to spend hours each week on administration tasks like paying bills and responding to emails.
Finally, property management gives you the opportunity to keep an eye on the market and plan ahead. When you manage your rentals yourself, you lose control of pricing, which might not be good news if you’re looking to turn a profit. By contrast, a property manager has access to all available data on local prices in order to negotiate the best deal.
Property management is becoming a necessity in today’s competitive world. It offers real benefits to landlords and tenants alike. With so much at stake, however, it pays to do your homework thoroughly before signing anything away. You never know when something might go wrong, which could mean losing thousands of pounds.