For Hertfordshire renters and landlords with properties in Hitchin, Biggleswade, Letchworth Garden City, Stevenage, Stotfold or Welwyn there are some significant shifts in the rental market this May which provide plenty of food for thought.
Where have all the tenants gone?
In our last Hertfordshire rental market review, we noted a sudden drop in the number of tenants seeking properties in the early autumn months of 2023. This trend has continued apace over the winter and spring months, with high-quality tenants becoming increasingly difficult to find.
Why is this happening? The main culprit appears to be the rising cost of moving home. Many tenants are choosing to stay put, in properties that are not ideal – but where they feel they can negotiate on rent increases with current landlords – whilst avoiding the financial burden of moving to a new home.
From January – March 2024, across the UK, letting agents averaged 13 enquiries per rental property, down from 19 last year but still higher than the pre-pandemic average of five. Rightmove Rental Trends Tracker
As the data from Rightmove shows, tenant enquiries are currently down on 2023 levels – but per property, they are still significantly up on pre-pandemic times. This echoes what we’re seeing at M A S O N S. There are still great tenants out there, but we have to be more creative in how we market our properties, to ensure we reach the very best pool of potential tenants.
It’s all about the £££s!
In today’s market, tenant moves are increasingly likely to be motivated by financial pressures. Sadly, this is a sign of the times, as monthly rents continue to increase, and the cost-of-living crisis continues to bite.
Instead of moving for positive reasons, such as additional space, or a better location – we now see tenants moving from expensive areas (such as Greater London), to access more affordable rent.
To avoid this situation and to maintain long-term tenants, we always advise
M A S O N S landlords to negotiate rents annually, preventing sudden, unaffordable rent hikes.
Size matters too.
Alongside relocations for more affordable rent, we’re seeing a trend for down-sizing too – likely driven by the wider cost-of-living crisis. This means that landlords with one-and two-bedroom homes are still finding that their properties are in high demand.
This trend is reflected in broader national surveys:
Two-bedroom properties are spending an average of 10 days less on the market compared to pre-pandemic times, while higher-end properties linger longer. [Source Savills analysis of Zoopla data]
Larger homes (four-bedroom and above) are most likely to see price reductions, with 30% experiencing cuts, a record for this time of year. The Rightmove Rental Trends Tracker (Jan-Mar 2024)
Rental price reductions
Whilst we have a market, where properties remain in short supply – price reductions on platforms such as Rightmove are a growing issue for landlords.
We believe this is driven by falsely inflated valuations, provided by some rental agencies, to win business. Typically, this results in a failure to let the property at the inflated price, and an inevitable rent reduction on the advertised price. This is off-putting for potential renters and it’s why at M A S O N S, we advise landlords to go to market at a realistic and fair price.
What we’re observing in the Hertfordshire rental market, is echoed across the UK:
Rental price reductions are at a five-year high for this time of year, with 22% of properties seeing reductions, up from 16% last year. The Rightmove Rental Trends Tracker (Jan-Mar 2024)
Additionally, some landlords mistake the high rents of serviced accommodations for those of traditional rentals. While serviced accommodations do fetch higher rents, they come with significantly higher running costs and management demands. This confusion can result in unrealistic expectations and unnecessary rent reductions.
Despite all of this… rents keep on rising
Despite falling tenant demand, a wider cost-of-living crisis, and rising rental reductions overall, rents continue to rise – albeit at a slowing rate.
The Rightmove Rental Trends Tracker (Jan-Mar 2024) highlights:
- Market statistics: Rental property availability is 11% higher than last year but 26% below 2019 levels. Tenant demand has eased by 17% from last year but is still 54% higher than in 2019.
- Record high rents: The average rent for new properties outside London hits a 17th consecutive record at £1,291 pcm (in London this is £2,633 pcm).
- Slowing rent growth: Average rents are 8.5% higher year-on-year, but the growth rate is slowing for the second consecutive quarter.
- Affordability concerns: Despite the slower growth, rent prices remain at record levels, challenging affordability for tenants.
- Supply and demand: The rental supply-demand imbalance is improving but remains significant. Nearly 50,000 more rental properties are needed to reach pre-pandemic supply levels.
So, as summer hits Hertfordshire for 2024
We are still seeing a rental market that’s complex and challenging!
“Overall, we are seeing signs that the Hertfordshire rental market is cooling a little, but the ongoing imbalance of supply and demand continues to create a very competitive market, where rents are continuing to rise, all be it at a slower rate.” Connor Leane, Lettings Consultant, M A S O N S
As always, staying informed and adaptable is crucial for both landlords and tenants. For more detailed insights and personalised advice, please do give us a call and we’ll be happy to help. Drop us a line at [email protected] or call us on 01462 557477.
M A S O N S is a leading letting agent in Hitchin, covering rental and buy-to-let properties in Hertfordshire and beyond. Founded on award-winning lettings experience, we specialise in property management, buy-to-let in Hitchin, and residential lettings.
