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More Tenants Are Renewing Their Contracts Instead of Moving
This article is an external press release originally published on the Landlord News website, which has now been migrated to the Just Landlords blog.
New research provided by Hamptons International reveals that tenants are adopting a long-term view to renting property, with more private renters looking to renew their existing contracts.
As the nature of the rental market continues to evolve and change, it seems that both tenants and landlords are benefitting from longer tenancy agreements.
In August, the statistic of tenancy renewals across Great Britain last year stood at 2.5%.
Rental growth on renewed tenancies rose by 2.8%, which is the highest figure in 10 months.
This is particularly the case for London, where the number of tenancy renewals has risen 3.7% this year compared with the same period in 2017.
Renewal rents in London have risen for the last 3 months, reaching 3.2% year-on-year in August.
These findings are unsurprising given that tenants want to feel settled and landlords want to reduce tenant void periods in their rental property.
With less stock available on the open market to choose from, Hamptons International reports that average rents on newly let properties is also increasing.
Across Great Britain, the average rent of the new let rose to £975pcm in August 2018, led by gains in the Midlands and Wales with rents on new lets up to 3.3% year-on-year and 4.4% respectively.
However, London rents on newly let homes fell for the third consecutive month, down 0.8% year-on-year.
The capital remains the only region across the UK where rents are failing.
Aneisha Beveridge, analyst at Hamptons International, said: “Despite low stock levels, rents on newly let properties fell in London for the third consecutive month. Moving is costly for both tenant and landlord. In a period of uncertainty, where tenants’ incomes and landlords’ yields are squeezed, more tenancies are being renewed.
“With affordability stretched and less choice available on the open-market, more tenants are choosing to stay put. And with landlord yields under pressure from high property prices and tax changes, fewer landlords want to run the risk of looking for a new tenant and suffering void periods.
“But rents outside London continue to rise. Wales and the Midlands have driven rental growth outside the capital to increase 2.0% year-on-year, the strongest growth in nine months.”
