How are high rents affecting tenant affordability and preferences?
With rents still high and tenants still struggling to find a property to rent, how is that effecting tenant behaviour and affordability? Here are 4 of the latest trends.
The data shows that not much has changed in recent months - rents are still high, with low availability of stock. Seventy-six percent of tenants said that they'd found it difficult to find a rental property, according to Goodlord and Vouch's State of the Lettings Industry 2023. So what trends are emerging amid these conditions?
Tenants are moving further afield - even abroad - to escape high rents
SpareRoom recently reported that 72% of renters on its platform are at least considering moving to a new area due to high rents where they're currently living - and 50% said they knew someone that already had moved away.
More than that - seven percent of renters are even considering moving abroad, with Spain, Australia, and Portugal topping the list of the most popular alternative destinations.
"It’s crucial the government understands the severity of this situation and starts to intervene, or the housing crisis will drive more renters out of major cities, if not out of the UK entirely,” says Matt Hutchinson, Director at SpareRoom.
Tenants are looking to the bank of Mum and Dad to fund renting, not just buying
Under the Tenant Fees Act 2019, security deposits are limited to five weeks' rent in most cases. However, as rents rise, this is causing 54% of tenants to dip into their savings to cover this upfront cost, in a recent survey.
For some, that's not enough. Fifteen percent said they had to turn to their parents to help cover this cost, with others resorting to loans, credit cards, or overdrafts.
Twenty-six percent have had to reconsider their plans to move entirely.
"Many more are often left waiting for a previous deposit to be returned which can considerably delay their onward move, the result of which is that they miss out on the home they had intended to move to or at worst, are forced to further compromise to find a home," shares Sam Reynolds, CEO of Zero Deposit.
Funding first-time buyers now a family effort
At the other end of the scale, it's not just parents that are helping first time buyers get onto the property ladder.
Siblings are starting to chip in more to help make homeownership a reality, making up 11% of the family members that contribute to deposits with an average of £10,250 in 2023.
Parents top the list, with £15,250 on average, while grandparents are third in line, giving £10,000 on average.
Harriet Holmes, AML Services Manager at Thirdfort, advises estate agents to make sure they're conducting thorough anti-money laundering checks, asking for proof of asset sale or inheritance for example, where necessary.
Energy efficiency still a top priority for tenants
Although the majority of buyers are happy to pay for a property in need of renovation, renters don't have the luxury of being able to refurbish or upgrade their properties, according to Rightmove research.
This means that they tend to look for a property with a higher spec - particularly when it comes to energy efficiency.
Smart tech is a key preference as well, helping renters to better manage their energy consumption, among other uses.
Despite proposals for landlords to upgrade their properties to an EPC C rating being dropped, this tenant preference shows the value in investing in energy efficiency going forwards.