News Lettings Market: 2018 Predictions In West Sussex
Published by Ben on 7th February, 2018
There is always a desire to look forward in the rental market, and this means predictions are frequently in demand. We may be into the second month of 2018 but with so much of the year still ahead of us, people are keen to know how the lettings market is likely to perform for the rest of 2018. As you would expect, there are many issues which will impact on the market, and there are many opinions. At Taylor Robinson, as your local letting specialist,we aim to provide you with insight into what we think will happen in the West Sussex letting market for 2018.
There is a belief rents will rise in 2018
A report provided by ARLA Propertymark suggests that 59% of estate agents expect there to be rental fee increase in 2018 while just 18% of agents believe that rental fees will fall. One likely reason for this increase in rental fees could be found in the fact that 62% of agents believe that there will a fall in the supply of rental property in 2018. This can be placed alongside the demand for rental property continuing to rise, which is expected by 53% of respondents to the ARLA Propertymark study.
Will many landlords sell up in 2018?
The National Landlords Association, the NLA, believes that there will be an exodus of landlords from the industry in 2018. A study published at the beginning of the year suggests that as many as 20% of member landlords intend to reduce the number of properties they hold in their portfolio. A fall in supply of this magnitude would likely lead to rental increases with demand outstripping the supply of property.
A quick review of the various specialists in the lettings market suggest that a rise in rental fees is expected, but equally, there are concerns that there isn’t much scope for rents to rise by much. There is a feeling that tenants are reaching a ceiling of what they can afford when it comes to rents, so while there is an expectation of rents increasing, these increases shouldn’t be by too much. This follows the pattern of predictions for the property market with a slow rate of growth tipped for house prices in 2018.
2018 will pose many problems for landlords
Issues landlords will have to deal with in 2018 include:
· Increased focus on energy efficiency and the introduction of Minimum Energy Efficiency Standard (MEES)
· Possible reforms to encourage longer term tenancies
· The introduction of GDPR impacting on how landlords collect and use data
· Will stamp duty cut allow more tenants to afford to buy property?
Some people believe that this year will see a removal of letting fees and a capping of deposit amounts, but these changes look set to be made in spring of 2019. This means that there isn’t going to be an immediate impact on the letting market but many landlords, tenants and agents may find that their behaviour changes due to the impending changes.
It may be that the in the latter half of the year, potential tenants will try to hold off so that they can move after the fees have been removed and capped, saving themselves money. Of course, there are plenty in the industry who believe that the change will lead to a rise in costs elsewhere in the letting process, so tenants may not be any better off.
There are many opinions on this matter and Shelter have conducted a study on the impact that the ban on letting fees had in Scotland. Shelter’s findings suggest that there hasn’t been a notable rise in rental fees after the change. Tenants will hope that this outcome is replicated in England and Wales.
As of February 2018, the average rent per month, according to home.co.uk stood at:
· Crawley: £959 per calendar month
· Horsham: £1,384 per calendar month
· Worthing: £862 per calendar month
· East Grinstead: £1,184 per calendar month
With so many factors influencing the rental market, it would be wrong to make a prediction in any great confidence. However, there is a consensus that rental fees are set to rise in 2018 and there are factors which would suggest this is likely to happen.
If you are keen to stay in touch with the latest lettings news in your area, stay in touch with Taylor Robinson.