Want to rent? Join the race: Properties snapped up in minutes, prices soaring, gazumping rife, the rental market’s seldom been so hot
Roseanna Lane has found it almost impossible get a two-bedroom property in her price range
Roseanna Lane thought she had plenty of time to find a new flat to rent when she gave notice to her landlord two months ago. But despite registering with eight estate agents in Richmond, South-West London, Roseanna and her partner Nick have found it almost impossible to nail down a two-bedroom property in their price range.
Even after raising their budget from £1,500 to £2,000 a month and considering properties farther afield, the couple, both 24, were repeatedly outbid by tenants willing to pay more. And they are not alone. Experts warn that the rental market is in chaos following a spike in demand after lockdown — particularly in big cities where workers are returning to the office, and student towns now that universities have reopened.
Agents say properties are being snatched up in as little as 24 hours — in which time applicants are registered, vetted, shown the flat and have their paperwork processed — before tenants move in a few days later. Renters also complain of being gazumped by others offering more money at the last minute.
Nervous landlords are desperate for financial security after the Covid-crisis ban on evictions, which only ended in May. As a result, many are increasing rents, carrying out stricter income checks and demanding that tenants commit to longer contracts.
So even those who manage to find somewhere to live now face paying hundreds of pounds more per month, forking out a year’s rent upfront and locking into three-year tenancies for a property that likely doesn’t tick all their boxes.
Supply has also been hit by reforms to the buy-to-let sector, which has left landlords struggling to make a profit after losing lucrative tax breaks.
Many have sold up to take advantage of the stamp duty holiday and rising house prices. Others have converted their properties to holiday lets.
Picky landlords and huge fee hikes
Roseanna, who works in technology PR, says: ‘We’d look at a property that was not quite right but before we could make an offer, it was gone. We were refreshing websites such as Rightmove constantly.
‘Some of the prices were ridiculous — I found it sickening. Before lockdown, I was renting a two-bed flat in Richmond with a friend for £1,500 a month, but we were seeing some for as much as £2,250 a month that were just not worth the money.’
The couple were warned about a shortage of properties but thought the agents were just trying to get them to move quickly.
They were also told that landlords wanted more security and were becoming far fussier about tenants.
Hot property: Agents say properties are being snatched up in as little as 24 hours – in which time applicants are registered, vetted, shown the flat and have their paperwork processed
Roseanna says: ‘We made sure to emphasise that we are a tidy, professional couple with stable jobs.’
She also found that landlords were unwilling to negotiate on rent. For one flat, the couple offered £1,800 — £100 below the asking price — and it was rejected straight away.
The pair later learnt that the person who secured the tenancy offered more than the price advertised.
They eventually settled on a two-bed flat outside Richmond because they were running out of time. They offered £1,600 a month — £25 more than what was asked.
They had to pay a holding deposit of a week’s rent to secure the property and agree to a three-year contract with a one-year break clause.
Pounce first thing or there’s no hope
IDA Amegbey, who works for an investment platform, is struggling to find somewhere to live in Bristol.
She says the first hurdle is price. Over the past few years she has seen rent soar. Before the pandemic, a room in a shared house cost between £300 and £500 a month. Now, the starting price is £500. Meanwhile, the cost of a one-bed flat has risen from £600 to about £900.
And with a small pool of eligible properties, securing a viewing, let alone the chance to put your name on a list, is difficult.
Ida, 30, says estate agents are no longer taking your details to let you know when something suitable crops up. ‘You now need to check the various websites first thing in the morning when new accommodation is listed, accept the earliest available viewing, then hope that by the time you view the flat, someone else hasn’t been for a viewing and requested to take up the listing,’ she says.
‘It’s not a case of finding a place you can afford or you like, or making sure the people you’ll be living with are compatible. You just take what you can get. It is frantic and stressful.’
Ida says she has heard of people sleeping on friends’ couches because they haven’t found a place to live after hunting for months on end.
She adds that tenants are also so worried about the rental market, they are putting up with more unfair treatment by landlords.
‘People I know are less likely to contest unfair charges or report too many repairs,’ says Ida. ‘We feel we are tiptoeing around our landlords. Ours put the rent up by £100 a month at the start of the pandemic when two of my housemates had been furloughed and elsewhere people were losing their jobs. We just paid it.’
Stuck in limbo with time running out
Bethan Howe has been looking for a four-bed house in Bristol with three other young professionals since June, when their landlord told them he wanted to sell their flat.
He gave them until the end of September to find something but they have had no luck.
Bethan Howe has been looking for a four-bed house in Bristol with three other young professionals since June
Bethan, 23, says: ‘There are so few houses available for sharers — and when one does appear, we hardly even get the chance to arrange a viewing before they are booked up or people put in an offer without seeing the house.
‘Also, one of the people I’m trying to rent with is doing a PhD and although she is salaried, landlords often consider her a student and reject us on that basis.’
Their landlord has now given them until November to move out, but Bethan says she is still not confident they will find somewhere.
Another tenant, who wishes to remain anonymous, told Money Mail she is currently battling her landlord’s demand for an extra £150 a month for a new tenancy once her existing one ends.
The 29-year-old pays £800 a month for a one-bed flat in Manchester, but has been told this will rise to £950. She says: ‘The justification has simply been ‘the market’. It’s crazy this is happening just before Christmas.’
Some pay a year’s rent up front
There were nearly half (46 per cent) as many homes available to rent across Britain in August compared with the same month last year, according to estate agents Hamptons.
At the same time, the firm saw an 8 per cent increase in people looking to rent.
The average monthly rent on a new let increased by 7.4 per cent across the country, from £1,010 to £1,085.
Tenants in the South West of England saw the biggest hikes, with the average rent rising by 13.9 per cent, from £868 to £989, while those in the South East faced rises of 12.8 per cent — £138 more a month.
Along with Wales, Scotland has seen the sharpest drop in rental properties in Britain. As a result, the average rent in Wales has risen by 12.9 per cent while in Scotland it has gone up by 10.8 per cent, according to HomeLet.
Trade body ARLA Propertymark, which represents lettings agents, says the number of tenants being hit by rent increases jumped significantly for the second month in a row in August, with 79 per cent of agents saying landlords were raising rents, compared with 71 per cent in July.
It also reported record high numbers of new prospective tenants, with 107 per branch.
The house-share site Spareroom currently has more ‘room wanted’ adverts than it has postings for rooms available. This is only the third time this has happened in the UK in the past six years (the last was in 2019).
Lucy Devine, lettings consultant at Hamptons in Haywards Heath, West Sussex, says 27 per cent of properties have gone for over the asking price in the past year.
This means an extra £194 a month for landlords, on average.
Tenants hoping to make themselves more appealing to landlords have been offering as much as six months’ rent upfront.
Ms Devine says: ‘I had to block out a whole day for viewings of a four-bed home because the interest poured in. We usually spread viewings over a few weeks.
‘That day we had six offers, with tenants offering above the asking price, longer tenancy agreements and advance rent.’
Tenants who earn average salaries spend almost a quarter of their income on rent, according to the Office for National Statistics — in hotspot London you would have to spend 37.7 per cent of a typical income on rent.
Adam Stone, lettings manager at Winkworth’s Clerkenwell and City office, says: ‘We have been getting dozens of enquiries for all our properties and generally receive up to five or six offers, some well over the asking price.’
Joseph Cooper, from The Keel, a development of 240 apartments in Liverpool, says flats are being snapped up unviewed within an hour of being listed online.
Enquiries were up 1,650 per cent last month compared with the year before, he adds, as young people returned to the city after moving in with their parents during lockdown.
Amelia Greene, director in the prime lettings team at Savills, says the return of international travel, combined with full easing of lockdown restrictions, has sent the market into a frenzy.
She adds: ‘Demand is up across the board, but hotspots in North and East London have been particularly popular.
In some instances, tenants are ensuring that they are the most appealing candidate by paying for a full year upfront, or by committing to properties unseen.’
Sarah Coles, from investment firm Hargreaves Lansdown, says: ‘Generation rent has been hit hard during the crisis. They were more likely to have borrowed money to make ends meet, and those already in debt were more likely to have borrowed more.
‘The pandemic pushed the finances of many of them to breaking point, so a hike in rental costs is the last thing they need.’