Are We Heading Toward a Lettings Crisis?

Prominent London sales & lettings agent Chestertons released a report this week that suggested that this might just be the case. With 45% fewer rental properties on the market in London than this time last year, tenants are being squeezed by simple supply/demand economics. Cost of living aside (we’ll come to that), the average rent in London has increased by 14% YOY, well ahead of even the most liberal estimation of inflation, leaving tenants paying on average nearly £2200 per calendar month (PCM). That’s if they’re lucky enough to find a rental property at all. 

According to Chesterton’s MD, Richard Davies, the business has seen a staggering 171% increase in prospective tenant enquiries over the same period. It’s no surprise then that 24% more tenants are choosing to renew their tenancy agreements than in 2019. Why move when there’s nowhere to move to? Sounds a little like the sales market at the height of the pandemic. 

With Martin Lewis (@MartinSLewis), founder of tweeting on Wednesday night that the energy fuel cap is set to rise by 78%, adding £3.5k on annual energy bills, tenants may be looking to the second half of the year with some well founded trepidation. 

CPI (consumer price inflation) is at 9.4% and expected to rise, with RPI (retail prices index - the measure we all used to use) at a more realistic 11.8%. Add this to the English Private Landlord Survey claiming that a further 10% of landlords are already in the process of selling their properties then you’d be forgiven for suggesting we’re entering unprecedented and extremely worrying times. 

So, not enough stock to choose from, at a rate that fewer people can afford and wages affording less and less, something - for tenants, landlords and letting agents - has to give. 
An alternative to selling and exiting the market, forcing less choice and higher rents to tenants is to unlock landlord assets with Wectory. Wectory provides advances on landlord rental income, with 80% using the injection to fund further property purchases to let, or maintain existing ones, making them a better place to live. Frequently, this encourages landlords to renew tenancies ahead of schedule, giving tenants extra security and stable rent, landlords more profitable portfolios and agency more properties to manage. 

A new solution to a very current problem. Think now. Think Wectory.