Tue, 02 May 2023 | Renting
The rental market in the South East of the United Kingdom, including areas such as London, Berkshire, Hampshire and Surrey, is facing a significant challenge - a severe lack of supply of rental properties, coupled with an overwhelming demand from tenants. This has resulted in a supply and demand issue that is causing concerns among renters and landlords alike.
In this article we will explore the reasons behind this problem and its impact on the rental market in the South East UK.
The South East UK has long been a desirable location for renters due to its vibrant job market, cultural attractions, and excellent transportation links. However, the supply of available rental properties has not kept up with the increasing demand. One of the main reasons for this shortage of supply is the high cost of housing in the region. The South East UK has some of the highest property prices in the country, making it difficult for many individuals and families to afford to buy a home. As a result, more people are turning to the rental market as a more feasible option, driving up demand for rental properties.
Another factor contributing to the supply and demand issue is the limited availability of land for new construction. The South East UK is a densely populated region with limited space for new developments, particularly in popular areas close to city centres or transportation hubs. This has led to a shortage of new rental properties being built, further exacerbating the supply crunch.
Where new developments are built or current buildings, such as office spaces which no longer have a huge demand due to the increase of people working from home, are renovated into apartments to rent, we are seeing a huge take up from tenants. With many developments being fully recovered prior to build completion.
The regulatory environment in the UK has also impacted the supply of rental properties. Changes in tax laws and increased regulations for landlords, such as stricter licensing requirements and increased compliance costs, have led to some landlords reducing their rental property portfolios or exiting the market altogether. This has resulted in fewer properties available for rent, putting additional pressure on the supply side of the equation.
The lack of supply and high demand for rental properties in the South East UK has significant implications for both renters and landlords.
For renters, it means increased competition for available properties, leading to higher rents, shorter rental terms, and sometimes compromising on location or quality of properties. It can also result in longer search times and more stringent rental requirements, such as higher credit scores or guarantors, making it challenging for some tenants to secure a rental property.
On the other hand, landlords may face challenges as well. With the ever-changing regulatory landscape, landlords must stay updated and compliant with the evolving regulations, which can add to the administrative burden and cost of managing rental properties. However, these changes are far outweighed by the potential benefits for savvy landlords. In the long run, high demand means higher rents and increased profitability!
One thing is clear, the huge lack of supply of rental properties in the South East, especially across Berkshire, Surrey and Hampshire, has created a huge opportunity for Landlords or Investors looking to expand in the property market.
With many excellent investment properties currently on the market, some with tenants in situ (removing the worry about filling the property quickly), landlords can really capitalise on the current demand.
If you already own properties locally, or are looking at investing in the area, we would love to talk to you. Contact your local lettings team today to discover how we can help you maintain and successfully grow a profitable property portfolio.