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Wales most likely to see rate increases in 2023
With relatively low levels of activity currently being experienced across the residential housing market, more and more attention is being focused on the buy-to-let sector.
As such, it’s hardly a surprise to see the Q2 2023 Landlord Panel research from BVA BDRC – in conjunction with Foundation Home Loans – show that tenant demand remains high and stable, with two thirds of respondents continuing to report increased demand over the last quarter.
The research outlined that just 2% of landlords have seen a decrease in demand over the last three months and, with an increasing proportion of accidental or amateur landlords selling rental properties, there’s no sign of any let up with demand currently sitting at an historic high
From a regional standpoint, those with property in Outer London and the East of England reported the strongest increase in demand in Q2, with landlords operating in the West Midlands and North East reported the lowest levels of increased demand.
This heightened demand is also resulting in a greater proportion of landlords reporting rising rents in Q2 ’23, with 85% of respondents reportedly experiencing an uplift in rents being charged within the areas they let properties.
The proportion of landlords planning to increase rents in the next six months remains stable at around 1 in 2. However, single property landlords are said to be much more reluctant to increase rents – with just 29% planning to do so - and those who are planning an increase will do so by 8.4% on average.
Harking back to regional trends, landlords with rental properties in Wales are most likely to report seeing rents increasing at 94%; (slide 30) and landlords operating in the South West are most likely to have increased rents in the last 12 months (slide 31)
Increased running and mortgage finance costs continued to be the main causes of planned rental increases in Q2, with the proportion of landlords both increasing rents to cover increased mortgage finance costs and demonstrate a higher yield to lenders when remortgaging climbing by 8% and 6% respectively.
The private rented sector continues to generate plenty of debate, but what we can be sure of is the importance of the roles played by landlords, BTL lenders and the intermediary market for a growing number of people and families across the UK.
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