Rental Market About to Heat Up This Summer?

The summer is traditionally a busy time for the buy-to-let market. Families are looking for a new home before the school year starts, and it’s a less disruptive time for tenants to move. This year, things could be even busier!

Experts at Foxtons, a leading London estate agent, are reporting a significant increase in demand from potential renters. Between May and June, applications jumped by 15%!

What’s Driving the Demand?

Back-to-school season: Families are out in force looking for a place to settle before the school year begins.
Student influx: London sees a massive influx of students every year, all trying to find accommodation for the next academic year.
Rising mortgage rates: With high mortgage rates, more people are choosing to rent rather than buy.

Landlords Could Benefit

This surge in demand could be a real game-changer for landlords who have been struggling in recent years. With restrictions on tax relief and warnings about affordability, many landlords have seen their profits squeezed.

This summer could be the boost they need.

The data is looking good:

Applicant budgets rising: Tenants are willing to pay more for a decent property, with average budgets reaching a record £547 per month – that’s 2% higher than last year. One-bedroom flats have seen a particularly big increase, with budgets rising by 5%.
More listings: There’s an 8% increase in new market listings this year, suggesting more landlords are putting their properties on the market to cash in on the rising demand.

Is there a catch?

While things are looking up, it’s not all rosy.

Rental growth has slowed: Despite the increased demand, rents in the capital actually decreased by 2% annually. This suggests that renters are reaching their affordability limits in the face of the cost-of-living crisis.
Uncertainty over buy-to-let future: New Labour government policies like banning ‘no-fault’ eviction notices are causing concern for some landlords.

The Bottom Line

Despite the challenges, the rental market is looking positive for landlords. There’s a clear increase in demand, and with a lack of stock, many landlords could be in a strong position to charge higher rents.

If you’re considering investing in buy-to-let, this could be a good time to get involved. But be sure to do your research and understand the potential risks before you take the plunge.