Compounding this is the cost-of-living crisis, which means many landlords are facing rising mortgage rates at the same time as uncertainty over rental income is increasing.
The result of the changes over the past few years has been a fall of nearly 50% in the number of properties available to rent. Propertymark reports that approximately 30 properties were available to rent per estate agent branch in March 2019, whereas by March 2022 that figure had dropped to just 15.6. In London, the figures are even more dramatic, with Chestertons reporting a drop of 38% in the number of available rental properties between July 2021 and July 2022, while tenant enquiries increased by 60% over the same period.
From the renter's perspective, the diminishing number of landlords is making for fierce competition when it comes to finding somewhere to live. According to UK rental guarantor service Housing Hand, this is leading to heightened inequality in the rental sector, with tenants who can offer to pay rent upfront gaining a distinct advantage when it comes to securing their desired property.
All this comes at a time when the Centre for Economics & Business Research projects that 407,000 families – equating to nearly one in ten tenant households in England – will fall into rent arrears this year as the cost-of-living crisis continues to ratchet up the pressure. That’s a 31% increase compared to the number of households who got behind on their rent during the first year of the pandemic.
Graham Hayward, Chief Operating Officer, Housing Hand, says: “At a time when the private rented sector is facing threats to its longevity from multiple directions, it is important that we do all we can to support both landlords and tenants. The private rented sector is a valuable resource that needs careful attention if we are to preserve it. This is why services such as pre-validation checks and rental guarantor services are so important.”
To level the playing field in terms of access to rental homes, Housing Hand is working with Canopy to support renters who don’t meet traditional referencing requirements. While renters usually have to earn 2.5 to 3 times the annual rental amount in order to be eligible to rent a home, with Housing Hand, they need just 1.5 times net earnings to qualify. Housing Hand then serves as the individual’s rent guarantor.
Meanwhile, Housing Hand has invested in new technology and processes to speed up the pre-validation element of its service. This means that renters have gone from waiting 48 hours for pre-validation checks to complete to just 48 seconds. Again, this is supporting more equitable access to rental properties.
James Maguire, Head of Sales and Business Development, Housing Hand, concludes: “There’s no denying just how tough the rental sector feels for both tenants and landlords right now. By providing a bit of reassurance and support for all parties, we hope to remove some of the stress from the rental process, as well as deliver peace of mind for renters and landlords alike.”
