The UK rental market is thriving at the expense of the property sales market, making it appear as if next year house rentals will exceed purchases for the first time since the 1930s, as buyers struggle to find affordable property.
According to Countrywide, the UK’s biggest estate agency chain, sales market activity has lessened since the Brexit vote, and a lack of available properties combined with increasing prices has resulted in more rentals than purchases.
Countryside research director Johnny Morris said that the uncertainty induced by Brexit has boosted the rental market, with record activity occurring in September. More properties were being let and tenants were renewing their contracts.
Separate reports suggest that new home acquisition is increasingly difficult, with prices going up and being deposits being required. Consequently, home ownership dropped to its lowest level in 30 years at the beginning of 2016. Recent mortgage lender figures reveal a slight increase in the number of home purchase loans being taken out, but the number of available properties is at a record low and prices are going up.
Official figures show that in 2015 over a million properties priced at more than £40,000 changed hands. Mr Morris said that over the past five years mainstream rental activity has been gaining momentum.
There was a property boom in March as landlords tried to purchase properties before stamp duty rates changed, leading to an increase in the number of rental properties advertised. Mr Morris added that when informally advertised lets were factored in, the rental market may have already outstripped the sales market.