With the supply-demand imbalance in the private rented sector continuing to widen, many renters are being priced out of the market in their desire areas.
The shortage of homes to rent is placing upward pressure on rental values across many parts of the country, led by gains in Wales when analysing the market outside London, according to Rightmove.
Cardiff in particular is seeing a surge in rental values as a growing number of people seek rental accommodation in the Welsh capital.
One prospective renter has described Cardiff’s rental market as “demoralising”.
The latest data provided by Rightmove shows that the average rent for a property in Cardiff between July and September this year was £1,041 per calendar month (pcm), up from £870pcm at the same time last year. That is an increase of 19.6%.
Across Wales, the company’s figures suggest the average cost of a rental property is £974pcm – up 15% from last year.
Enfys Kennard-Smith, who identifies as non-binary, told the BBC that the process of finding a place to live in Cardiff has been “demoralising”.
“I’m going to keep trying [looking for a place to rent] but I don’t hold out too much hope,” they said.
Jon Hooper-Nash, director of lettings at estate agents Jeffrey Ross, has described the Cardiff rental market as “bonkers”.
He added: “I’ve never known it to be as busy as it is at the moment.
“We’ve never seen so many people desperate for a rental property which we simply don’t have half the time.
“We are really struggling to cater for the demand.”
He said there were 126 enquiries about one house in the city and “that’s quite common”, he explained.
“We’ve had numbers as high as up to 250 on one property that we rented out,” he added.
A new law in Wales coming into force from December will give greater protection to tenants.
But some argue the Renting Homes Wales Act will make things more difficult and complicated for landlords, and this has led to some fleeing the buy-to-let market at a time when more housing stock is urgently needed.
Matt Dicks, director of Chartered Institute of Housing, said: “There is a chronic shortage of homes at social and affordable rent as well, so worryingly we may well see a spike in homelessness as a result.”
“Ultimately, this is the historic undersupply of social and affordable housing catching up with us,” he added. “More affordable housing would better insulate us against the unforeseen market trends that we are currently experiencing.”
Comments (6)
All down to Drakefool and his anti-landlord policies. He has sown the wind, now he reaps the whirlwind. He will, being a politician, blame everyone else.
WAG has shot itself in the foot by listening to tenant lobby groups, who said there was a problem with the PRS, when there wasn’t in Wales. Every agent here has been Licenced of over 5 years and WAG through Rent Smart Wales have much more data about the housing stock than in England. The Housing Wales Act is so complicated that it has pushed many self managing landlords over the edge, causing them to sell up and the reduced supply has pushed inquiry levels and rents up across the country.
Unfortunately, some people in a state of desperation will rent a property which they cannot really afford, which will cause major management problems in a few months. Many of our landlords are taking the view that it is better to take a realistic rent than be too greedy, as they know they will get 100% and will have no voids or additional costs. Landlord’s biggest earner over the past 2 years has been the capital growth, not the rental yield.
Governments across the UK are being comprehensively warned that over-excessive regulation and taxation will cause Landlords to exit the sector thereby diminishing demand. Meanwhile, with the average UK property price now £296,000 meanwhile the UK median salary is around £25k- the average buyer, therefore, is required to pay x12 their annual salary in a marketplace where x4 is a standard mortgage offer. So we are reducing rental supply in a marketplace where property ownership (the government’s pledged objective) is out of reach and unachievable for many.
So, we see the housing register explode and demand for a shrinking PRS soar- creating the imbalance we see today with rents across much of the UK up 10-20% on pre-pandemic peaks- and further increases likely still.
The warnings have been dismissed by government and tenant action groups as ‘self-interested’ and profit-driven- but the warnings are proving to be very accurate and who suffers- Tenants. But will either group admit this impact and the error of their decisions & objectives? Don’t be daft.
For Landlords that stay the course, however, (especially those fortunate not to have a mortgage) they will likely see their highest income/yield and tenancy terms extend and voids near vanish- a good reason for many to stay put where they are.
Sadly, with substantial reform in the pipeline and more likely to come should Labour be elected at the next GE (which is looking increasingly certified)- this pattern will not change- the market conditions will et worse for Tenants- it is important that tenants learn where to direct their ire appropriately and it is NOT at their Landlords & Letting Agents but at those supposedly protecting their best interests.
Absolutely correct KByfield04. It proves the point that they should have provided more support to the hand that feeds, instead of biting it. Beggars belief that they are that dumb not to notice this mess is of all political parties doing and is on course to get worse, much worse.
Government hatred of landlords = fewer landlords = fewer properties = higher rents
and next up in stating the bleeding obvious news, the Pope is declared a Catholic and bears really do poop in the woods!
You can blame the Welsh Government for this fiasco. They went after landlords and they didn’t like it one bit and sold up. Supply and demand. Its going to get worse in 2023, the very people they thought they were championing (the tenant) Occupation Contract Holder is now on the receiving end of lack of supply and high demand. Forcing prices up is just the tip of the iceberg.