In early December 2022, new Housing Minister Felicity Buchanan announced that the UK’s rental sector decreased by 260,000 households since 2016. This staggering figure has created excessive pressure on the private rental sector (PRS). As we welcome the new year, UK rental demand is still increasing, as the number of available homes to rent remains low.
Read on as Rickman Properties shares updates on the UK housing market below and how this might affect you.
The Current State of the UK Rental Sector
Rent and housing prices hit an all-time high in 2022, as did homelessness, in the UK. Recent statistics reveal that 3,030 households were categorised as sleeping rough from April to June last year – a 34% rise from the same period the previous year. It’s important to note that this data reflects homelessness levels before rent costs hit an all-time high last autumn.
Unfortunately, these numbers paint a rocky picture of the 2023 UK rental market, both for private and government sectors. The government recently admitted that government-supplied housing builds might not be finished by the initially proposed deadline, suggesting the number of new homes delivered in 2024 could be less than initially projected. The government says it is preparing to update its targets and deadlines in the Housing for All strategy accordingly. These hiccups in the government housing sector have placed undue pressure on the private rental market, leaving many without housing that suits individual needs.
What is Causing the Decline in the UK Rental Market?
Buchanan hypothesises that it might be due in part to the pandemic, or from multiple households experiencing housing bubbles.
Buchanan also stated that it is difficult to know whether properties sold by one landlord were entering private ownership, or staying in the PRS with a different landlord. It’s also difficult to obtain metrics around how much landlords plan to expand or reduce their portfolios. Regardless, many UK residents feel the government is responsible for picking up the pieces of a mess they created. In response, the government has continued to build programmes, goals, and initiatives to stabilise the housing market in order to meet demand.
What Does This Mean for You?
Research from Aviva shows that up to a million people may rule themselves out of the first-time buyer market in the early months of 2023 due to pressures caused by the cost of living crisis. As a result, rental demand is likely to remain high this year. Data from HomeLet shows that the average UK rent in November 2022 (at £1,175) was 11.1% higher than 12 months prior. HomeLet’s rental index shows annual rental growth in all regions of the UK. If demand remains high and prices keep rising in 2023, the opportunity for landlords to generate a high rental yield increases. But tenants will be the most heavily impacted by this current state of affairs, resulting in many renters having limited options for their housing needs.
As we step into 2023, we will simply have to wait and see how the government handles this housing crisis. During these uncertain times, it’s more important than ever to have an estate agent like Rickman Properties Estate Agents. Rickman Properties’ agents are dedicated to their craft and ensure they are always up to date on the latest in London real estate. As such, Rickman Properties agents can help you with any of your buying, selling, or rental management needs.
Ready to finally start working with a professional London estate agent? Contact us for a free quote today.