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Monitoring the rental costs and tenant demand trends
Costs are rising, and tenant demand holds strong – so where will landlords increase rents?
Our latest Landlord Panel research in partnership with BVA BDRC for Q4 2022 offers an array of pertinent insights into performance and sentiment in the BTL marketplace.
The past few months have certainly proved a tricky period for landlords and advisers to keep track of events and influencing factors in the BTL sector. Meaning this is an opportune time to outline some overall and regional trends heading into 2023.
According to the research, perceived tenant demand remained stable in Q4, holding firm with 65% of landlord respondents registering ‘increased’ or ‘slightly increased’ demand, with a recent low of only 14% stating that they were unsure of the current demand situation. (slide 13) Interestingly, landlords in Central London reported the strongest increase in demand and also the highest strength of current demand. (slide 14)
Tenant demand in the North West was suggested to have remained relatively constrained, although it has reportedly fallen (on a net basis) in a number of regions, including the West Midlands, the South East and outer London. Those letting rental property in the West Midlands had the lowest net demand strength.
Staying with regional trends, the research also highlighted that landlords appear inclined to increase rents to align with local market rents (61%).
Landlords operating in central London were said to be most likely to report seeing rents increasing (slide 33) and landlords with property in Wales most likely to have increased rents in the last 12 months. Those in outer London reported a no change situation.
Alongside a host of other influencing factors, location will always play a key role for landlords when it comes to demand and rental charges. Due to a lack in the availability of quality rental stock and landlords having to cover increasing overheads, these are trends which are likely to continue in the first half of 2023 and will be interesting ones to monitor from a statistical viewpoint.
So, watch this space.
FOR INTERMEDIARIES ONLY
