With a rental crisis sweeping the Stroud district, we spoke to Clive Brown, Branch Manager at Sawyers Estate Agents, and Nick Ponting, Branch Manager of the Stroud Property Centre.
Clive Brown…writes: “Why is finding a rental property so difficult? So, what precisely has been happening and why do we find ourselves in this predicament?
“The rental market over the years has always been somewhat buoyant, though has had its ups and downs. However, since the easing of lockdown there has been a massive insurgence in demand, yet a dramatic decline in supply. Basic economics says under such conditions, prices rise, and this is precisely what we have seen.
“With the increase in demand for residential housing to buy, the knock-on effect is that prices have risen. Consequently, some landlords are of the opinion that sales prices either have hit a peak or have risen high enough for them to decide to exit the market by selling what were their previous investment rented properties. This is also partly brought on by the decrease in landlord incentives through the Government increasing taxes for landlords that have pushed some Landlords out of the market, resulting in a reduction of properties left to let.
“This also includes some forced landlords who entered the market a decade-plus ago when house prices were both lower and those that could not sell at the time took the view that renting provided the best alternative to leaving their properties empty but now prices have increased have now decided to sell. Then moving on to today, the continued lack of incentives for landlords means that we are seeing far less entering the market, which again means reduced supply.
“Turning to an increase in demand, during the national lockdown there was a reduced activity which was to be expected. However, now with lockdown easing demand for rental accommodation has shot up. Partly from what would have been natural demand anyway as the younger generation continues to struggle to enter the housing and so decide to rent instead, to those who have reached a new realism that they can now work from home so are less tied to needing close access to public transport hubs or their own mode of transport.
“Consequently, those living within the cities have opened their net wider and increased demand in what is rural parts of our beloved Gloucestershire. We are also finding further pressures from homeowners entering the rental arena. Both homeowners taking advantage of recent house price rises and their purchasers wanting to also take advantage of the recent Stamp Duty Holiday have forced sellers who are unable to find an alternative property to buy to ‘break the chain’ and rent instead
“The overall effect is a huge, unprecedented demand for rental properties never seen before. This has resulted in some remarkable prices being marketed at present by some agents. Either way, it is not good long-term for tenants, landlords, or the area. To landlords, there are benefits to have tenants on fair rents, as these tend to stay long term which reduces the void periods and reduces tenant turnover as increased turnover means increased repairs and maintenance which become less of a burden with the longer-term tenants who appreciate their landlords just as must as the landlords appreciate their tenants and understand their tenants’ social welfare.”
Nick Ponting…writes: “There are a few factors involved. Demand for rental property, in general, is rising and with fewer properties available, it goes some way to explaining the shortage.
“The tax legislation has also changed around Buy-To-Let, which has led to some landlords selling some of their rental properties, or simply deciding not to invest in more, whilst at the same time, tenants are staying in tenanted properties for longer.
“Since the property market reopened following the first lockdown in May 2020, house prices have risen dramatically and Stroud/Five Valleys has seen the biggest rise of all locally at over 16%. So for those tenants looking to buy, it means the amount of deposit they need has increased, which in turn keeps them in their rented property for longer.”