Rental market predictions 2020
2019 was a year marked by plunging supply levels, rising demand and prices, yet more legislation and landlord exoduses. According to Homelet’s index, the average rent rose by an inflation busting 3.2% (to November 2019) and by the same amount in London. The average rent now stands at £947pcm and £1,648 in London and £4,225 pcm
In Marylebone (median). The biggest rise was in Wales (+5.2%) and the smallest was in the West Midlands (+1.9%). Tellingly, there were no falls. The blame for those rising rents is being laid at the door of the government, whose targeting of private landlords is resulting in significant numbers selling up, restricting supply. Even June’s banning of tenants’ fees is having a negative impact, with fees simply being added to rents (source: Rightmove).
There are more planned legislative changes coming for 2020. In March, the Fitness for Human Habitation Act will be extended to include existing tenancies. From April, properties will need to have a minimum EPC rating of E. Also, in April, Capital Gains Tax (CGT) rules are changing - lettings relief is to be scrapped and CGT will have to be paid in full 30 days after a sale. And, from June, the banning of tenants’ fees will also apply to existing tenants. It is not yet clear when no fault evictions (Section 21 Notices) will be banned but may not happen until 2021. With the government’s focus likely to be on the Brexit trade deal rather than property, things are likely to continue along a very similar path over the next twelve months - rents will keep rising and supply continually falling.
David Cox, Chief Executive, ARLA Propertymark, says:
“For far too long, successive governments of all political persuasions have passed significant amounts of complex legislation for landlords. As a result, much of this year (2019) has dampened landlords’ appetites to invest and expand their portfolios, with many consolidating their assets, or choosing to step away from the sector altogether. This has impacted tenants most, who have restricted supply and have been faced with less choice and paying higher rents.
“Looking ahead to 2020, we hope the Government recognises the importance of increasing supply for tenants and uses it as an opportunity to make the market more attractive for landlords. This will encourage more landlords back into the market as well as ensure that tenants, including those who are most vulnerable, are not at a disadvantage in being able to find a suitable and affordable home to rent.”
And, in Marylebone, we are expecting a busy year, with high demand and rising rents, so if you are a landlord with properties in the area, give us a call at Manors estate agents and we can get things moving for you.