Yorkshire rental market forecast for 2020

For a growing number of Yorkshire people looking to rent, the dominant theme for 2020 will again be a shortage of stock to meet their needs, according to Will Linley of lettings specialists Linley and Simpson.Here, Will reveals his rental market forecast for the coming year: “We enter a new year and a new decade with a new government but also with this existing problem of spiralling demand and dwindling supply.“It is a gap that is poised to widen further without urgent action at the highest level to drive through positive, sustainable change. Whether through choice or circumstance, tenants are eyeing rental homes in ever- increasing numbers. Plus, when they pick up the keys, they are staying for longer, which is also limiting supply.“It is projected that by 2024 around one in four households will be turning to the private rented sector. That is a 24 per cent leap on the current trend.“In the here-and-now, this shortage of supply brings with it the likelihood of another year of climbing monthly rents across much of the Yorkshire lettings market.“In this coming year of all years, tenants and landlords alike would now benefit from someone with a 20/20 perfect vision for rebalancing the industry’s playing field.“The long-awaited Budget in February, which is mooted to be on or around Valentine’s Day - is a timely opportunity to incentivise more landlords to invest in buy-to-let, and rekindle the British love affair with property.“If it wishes to ‘turbo charge’ the turnaround that is needed to inject new rental homes into the market, it must halt the increased tax burden that has dampened the investment appetite of many private landlords.“The Budget will also be an early litmus test to see if the new government is indeed a listening one, and one takes heed of industry warnings about the supply pipeline drying up.“It failed to do so in 2019 when it persevered with the introduction of a letting fees ban. This is a move which, as widely predicted, has served only to increase rents, which is an unintended yet inevitable consequence.“Plus, there are mounting concerns as to whether another of Westminster’s favoured policies - encouraging the creation of big build-to-rent developments, funded by cash-rich institutions, is a silver bullet cure-all for the sector’s supply problems, or something that is primed to misfire.“Here in Yorkshire, as in many parts of the country, there seems to be over-optimism that build-to-rent can deliver the right type of homes in the right location at the right price to meet the right needs.“The focus on high-rise city centre towers of 20 storeys with largely one and two bed apartments commanding premium fees is at odds with where the real boost to the rental market is needed.“The need is in helping families to rent bigger homes in the suburbs, homes that are close to schools.“Neither does build-to-rent match the needs of Yorkshire’s growing, ageing population. Let’s remember the number of over-50s renting has soared at breathtaking rates across the UK in the last decade. There are now over 1.2m ‘silver tenants’ and that is double the total number just a decade ago.“Looking further ahead, research on our doorstep by the renowned Centre for Housing Policy at the University of York estimates that in just 20 years, up to one third of 60-year-olds will be renting privately.“This is one of the biggest warning bells as to the scale of the risk that comes from not lifting the multiple barriers to investment currently facing private landlords.“The new government should also focus on delivering significantly higher numbers of social housing to address the massive under-supply there as well. This lack of supply is driving tenants into the private rented sector, when they ought to be catered for through social housing.“Other developments we can expect to put their stamp on 2020 include the welcome move to make more rental properties more energy-efficient thanks to new green legislation poised for launch in April.“It is also likely that we will see more property names disappearing from the Yorkshire High Street as smaller lettting agents grapple to overcome financial and operational challenges and bigger chains explore acquisition opportunities as the market naturally consolidates.”Savills 2020 forecast for the rental market is that pressure on private landlords will limit the supply of rental properties, especially in the higher-value, lower-yielding markets. However, the proportion of household income that tenants can afford to pay as rent will be a constraint on rental growth. The firm expects rents to rise by two per cent in 2020 with five year growth predicted to be 15.4 per cent.

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