The Rental Property Market Rise in Detached Family Residences
Over the last few months, we’ve shared several articles about the shifting trends in the UK property market – and recent industry reports indicate that demand remains exceptionally high.
Detached properties and family homes are now the most sought-after rental accommodation, surpassing conventional investments such as student accommodation.
Let’s take a closer look at the West Sussex property market and the picture across the UK to quantify the enormous demand for quality rental homes – and how this offers an excellent opportunity for landlords.
Housing Market Values in 2021
While factors such as the Stamp Duty holiday undoubtedly contributed to the 2021 property boom, this is just a tiny part of a massive upward trend.
- Property values in the last 12 months have accelerated sharply.
- The average home has risen 5% in value in the previous five years.
- The housing market is now worth £9.2 trillion, with £8.2 trillion in privately owned properties.
In short, there’s never been a better time to be a homeowner!
Supply shortages remain significantly higher than pre-pandemic levels. That means that as new listings rebalance, there are still thousands of people looking to buy a home without corresponding availability on the market. As well as increasing competition (an average of 25 buyers are vying for every individual listing!), that means prices aren’t standing still.
In winter 2021, a low housing supply makes it a seller’s market and a perfect time for landlords to rent out larger family homes.
If you have a vacant West Sussex property and want to let to quality tenants, please get in touch with the Tod Anstee Lettings Team to get things moving!
Detached Rental Property Demand
Applications for tenancies in detached homes soared in Q3 of 2021 – and rental prices have risen twice as quickly as the UK average for all property types per the Deposit Protection Service.
To put that into context:
- UK average rent increased by 1.74% last quarter (equivalent to £14 a month).
- For detached properties, that climbs to 3.52% rent growth, or £38 a month.
There are several reasons behind this persistent demand.
As we know, millions of families and professionals looked to relocate outside of busy cities after the stress of lockdown in built-up urban areas. New applicants continue to prioritise having more living space.
Tenants in detached homes also stay for longer, which means that there are never enough rental opportunities to match requirements, and long lists of applicants wait to apply for new rental homes as they become vacant.
West Sussex remains one of the most attractive places to live in Britain, with outstanding schools, accessible transport links and high living standards, so this demand is incredibly high in our region.
Suppose you’re considering a new rental investment and aren’t familiar with West Sussex. In that case, we’d recommend visiting our News Pages, where we publish regular articles looking into average property values and demand in some of the most popular towns and villages.
Predictions for the 2022 Rental Market
Despite all the doom and gloom media reports anticipating property sales falling off a cliff edge when the Stamp Duty rates reverted, the opposite has happened.
Property experts have been forecasting this supply shortage for some time, and it’s clear that while many of the restrictive measures to combat the pandemic have ceased, interest isn’t letting up. Given the huge rises in property values (the average home is worth £40,000 more than five years ago), it’s also tough for first-time buyers to purchase a home.
In turn, this adds to rental demand. An analysis of data shows that the average employee now needs 15.7 years to save a deposit, during which time most will rent. Young professionals and families look for quality housing, safe communities, spacious properties and access to fresh air and countryside – and many are looking to rent long-term given the challenge of buying.
The benefits for landlords are substantial:
- Lower vacancies, longer terms, and faster tenant applications when a previous tenant leaves.
- More options to select quality applicants who are looking for a large family rental.
- Higher rental income, with premiums payable for outdoor space.
It’s therefore well worth looking at refurbishing vacant properties or highlighting the nearby amenities on offer to showcase your rental properties to the right audience, many of whom are moving to West Sussex from further afield.
How Landlords Can Match Detached Property Priorities
Today’s tenants are far more likely to want a sizeable family home near beaches, open space and rail links than opting for high-cost cramped housing in central cities.
There are several ways to ensure you enhance the interest in your rental portfolio and maximise rental values:
- Making basics better: new carpets, smart decor, well maintained outdoor space and off-road parking are all high on tenants’ wish lists.
- Well-presented kitchens: bathrooms and kitchens are key places to invest in rental property value. Economical appliances and boiler systems can also reduce energy bills and appeal to long-term tenants.
- Adding bedrooms: converting lofts or repurposing extensions are a viable investment, with an extra bedroom guaranteed to increase rental yield.
- Renovating flats: millions of UK rental homes have been split into separate apartments – and renovating a standalone property back into a larger family home may be beneficial.
- Added extras: if you’re keen to command premium rental rates, it’s essential to offer something unique. Examples include private driveways, fibre-optic broadband or modern security systems, all advantageous for family rentals.
Another factor is flexibility – if you’re targeting a niche tenant market, it’s crucial to think about what your ideal tenant will expect from their rental home. For example, permitting pets into your property (with provisions in your rental agreement to cover the costs of pet damage) is a great way to appeal to families. Discover more about the demand for pet-friendly rentals in our article, The Potential of Pet-Friendly Rental Properties.
If you’d like professional assistance comparing current investment properties available to expand your portfolio or want more information about maximising your rental income, please contact the Tod Anstee team for expert advice from the West Sussex property specialists.