The nation appears to be shifting back to ‘business as usual’, with lockdown restrictions more or less eased – albeit with masks still recommended in certain situations – and a slow return to the office as the country opens back up.
There is also a return to normalcy as far as the rental market is concerned, with tenant demand increasing and once again shortages of properties in many areas – a situation unseen since the start of 2020.
Below, we provide an overview of the lettings market, its recent trends, and how landlords can benefit from investing in buy-to-let now.
Interest in outer-London areas soars
The rental market has shown no signs of slowing down, with recent figures revealing demand in the UK’s major cities has hit an average of 33% – up from 23% in the same period a year ago.
As lockdown restrictions ease, demand has returned to city centres in strong numbers, and has surged even further as more businesses open their doors after successive lockdowns.
The South East has seen particularly strong rental growth with 10.6% year-on-year increases to rental values. The region is expected to appeal to even more tenants over the coming months as many people are searching for more space after a string of lockdowns and a rise in remote working.
This means an increasing number of people are making moves rather than extending their lease – creating additional levels of demand.
Further research has shown that this increase in rental demand has also caused a drop in void periods for landlords, reducing the average void period in England by a sizeable 15% overall.
What’s causing this demand?
Pent-up demand for rental accommodation is perhaps expected after a year ‘on hold’, when many professionals returned to their hometowns, either due to being furloughed, made redundant, or working from home.
Many of these professionals are now keen to return to their lives in towns like Bexhill, Eastbourne and Hastings, with the pubs, bars, restaurants, cultural venues, cinemas, theatres and activities these areas offer.
The Covid-19 pandemic has also further highlighted the importance of the private rented sector (PRS). While house prices have soared, it has become more challenging for some to get on the property ladder.
Renting, meanwhile, has again become cheaper than buying on a monthly basis, making it a more affordable option for many.
Demand/supply imbalance drives rents up
Over the last six months, average income for renters in England has risen by 8.2%. This followed a dip at the end of 2020 and in the early months of 2021. However, incomes have built back steady as the economy opened up once more.
Across East Sussex, the combined number of properties available to rent sits at 1,254, with 237 listed in the last 14 days (as of July 16 2021) and an average rent of £1,767 per month, according to figures from Home.
As has been the case over the last few years, East Sussex has a significantly higher proportion of tenants renting flats, compared to West Sussex and Hampshire.
This makes for a more appealing investment, with fewer properties on the market but higher potential incomes for professional landlords to earn as demand continues to outstrip supply.
Good news for landlords
In comparison to the sales market, the rental market has been far more flexible in adapting to the challenges raised by the pandemic.
So, while landlords have had to contend with a raft of new regulation in recent years, now is still a good time to invest in a buy-to-let.
As we mentioned previously, tenant demand is up as people continue to seek new, larger homes outside of the capital, meaning you will likely have a wider pool of potential renters to choose from and can expect fewer void periods.
There is also the reduced stamp duty to consider. Although the stamp duty holiday is tapering off, with the first phase having ended on July 30, you could still make the most of the savings for property worth up to £250,000 – a price you are more likely to find in East Sussex.
Now more than ever, working closely with an experienced, knowledgeable letting agent – one which understands the area you are letting in intimately – can help to ensure your tenancy runs smoothly.
Here at Oakfield Estate Agents, we will do all we can to help you let your home successfully, using our years of knowledge and experience. For further information on how to manage the lettings process, please get in touch with us today.
You can also request a free instant online valuation to see how much your East Sussex property could generate in rent each month.