The high demand for homes in the UK has resulted in a shortage of property in some areas, as well as an increase in rental prices; however, why has this happened, and what does it mean for finding a new home?
According to the Homelet Rental Index, rentals climbed by 0.8 per cent in March 2021 across the UK, representing a 3.4 per cent year-over-year gain. When it comes to London, according to estate agents, including letting agents in Barkingside, there has been a decline in general demand and, as a result, rental pricing until recently, but with the relaxation of the lockdown, this is already changing, with demand increasing and prices firming as a result.
When you shift your focus to the South-East of England, you’ll notice that prices have increased by 6.8% year over year. Even yet, this does not tell the whole tale. As a result, there’s more going on than just supply and demand, so what are the main reasons for the rise in rental prices?
What are the reasons for this?
There are a variety of reasons for the rise, each of which has slightly different consequences depending on where you are going in the UK. However, there are a few market triggers that are easy to spot that is unanimously agreed upon by all letting agents, including letting agents in Ilford.
Stamp Duty Holiday
When purchasing a home in the United Kingdom, a tax is levied on the purchase price. In July 2020, the UK government declared a Stamp Duty Holiday, which began on July 8, 2020, and will end on September 30, 2021. For those selling, this alone can result in a tax savings of more than £15,000. Of course, for more expensive residences, this figure can be much greater.
How it affects the rental market – As a result of rising housing prices in the UK in recent months, a large number of landlords are choosing to sell their properties rather than rent them. As a result, the overall housing stock available for rent has decreased. As a result, demand and prices have risen even higher.
The majority of us have spent more time at home in the last year. The potential of moving to a larger home with a garden or outside space has been too appealing for many living in flats, especially in city locations, and has driven up demand in the surrounding areas.
How it affects rental market? – With more individuals migrating to the counties and nearby towns to work in the big cities, demand and thus rental costs are increasing at a time when more residences are being sold. For a time, there was less demand in the cities, but that is changing now that the Covid-19 restrictions have been lifted.
Schooling Demands – As more people move around the UK, there is a greater demand for families to find houses near public schools. The majority of this demand would be for owning a home, but if supply is scarce, an increasing number of people will be willing to rent for a while.
How it affects the rental market? – The family must live inside the catchment area of the new local state school for their children to be accepted. If they can’t locate the right home to buy, this puts pressure on the most popular places near the schools, driving up rental prices.
Expectations for the property market
The euphoria surrounding the prospect of relocating to the United Kingdom is fueling a rush for the greatest residences on the market. Many agents including estate agents in Romford are able to rent houses without having to post them on major websites. The demand has become that high in recent times.
Similarly, during this period of high demand, it’s possible that stock levels in some parts of the UK will be lower than usual. As a result, make sure you’re up to date on what’s going on in the areas that interest you.
It’s difficult to predict the housing market’s future with absolute certainty, but once the Stamp Duty holiday for those buying and selling homes has passed and families are secure in the correct area for schools, there’s a high chance that rental prices will begin to stabilise. Clearly, any changes proposed by the government or related to Covid-19 might have an impact.