Surging demand for rented accommodation is stoking fears about an influx of disreputable investors into the UK’s private rental sector (PRS), according to our latest survey.
50% of UK landlords have seen an increase in tenant demand for their properties in the past 12 months – tallying with Rightmove data, which shows that demand is up 23% this year. The fear is that, with a growing imbalance between supply and demand, so-called ‘rogue’ landlords will be increasingly attracted to the UK’s lucrative PRS.
This is made more likely by the growing rental income on offer across the UK. In 2022, rents have grown:
17% in London
15.6% in Manchester
12.3% in Birmingham
It’s all contributing to the sense that the ‘balance of power’ has shifted – 69% of survey respondents say it’s moved from tenants to landlords in the past year.
The survey data doesn’t just tell of landlords fears for the PRS, but also for the increasingly precarious position tenants find themselves in:
57% of landlords say tenants are willing to pay higher rents to secure tenancies
55% say tenants will accept higher bills for utilities
69% say tenants have accepted unplanned rent increases.
This paints a picture where tenants are increasingly vulnerable to sub-standard landlord practices – feeding into fears about more ‘rogues’ capitalising on the current situation. Just one in eight landlords surveyed (13%) think tenants now expect or demand more from their landlords.
Similarly, 75% of landlords believe that the supply/demand imbalance means tenants are now having to be less ‘fussy’ about their rental homes – opening up the prospect of declining standards in the UK’s PRS.
Moubin Faizullah Khan, CEO of GetGround, said: “With recent history as our guide, it’s easy to imagine how the private rental sector could be brought into disrepute by bad actors: disproportionately high rents, unexpected bill increases, unfairly terminated tenancies, and so on.
“Landlords and tenants alike need the right protections and safeguards to ensure none of this poor behaviour is able to happen, particularly as high mortgage and energy costs continue to put even more pressure on landlords to find means to stay solvent.”
Ben Beadle, CEO of the NRLA, added: “GetGround’s snap poll data highlights a perfect storm that’s coming, combining the increased cost of living with rising rents. That rents continue to rise is due to the impact of a lack of supply and record demand in the private rented sector. This is very much a problem of the UK Government’s own making: reducing the PRS as landlords vote with their feet because of swingeing taxation and divisive rhetoric is in no-one’s interest.
“It’s time for the government to reverse this failed approach by reversing mortgage interest tax changes, abolishing the 3% stamp duty land tax surcharge, investing in social housing, and unfreezing local housing allowance for renters. A failure to do so will only ensure the current misery being felt by all in the sector continues.”
Wondering how the shifting balance of PRS power will affect your investments? Find out, with a free consultation with a GetGround property expert. Pick a time that suits you here.
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