Annual data analysis from property marketplace, TheHouseShop.com, has revealed the top 5 British cities that had the highest tenant demand and largest number of enquiries in 2017.
As Buy-To-Let investment becomes increasingly expensive and difficult, due to recent legislative changes brought in by the Conservative government, it is more important than ever that landlords are able to fill their properties and ensure regular rental income. By understanding the local rental market, landlords can invest in an area with high tenant demand, which will help to reduce the likelihood of lengthy and expensive void periods.
The top five rental hot-spots of 2017 are:
The annual data from each area was further broken down by the demographic of tenants making enquiries, listing type, property type and the number of bedrooms, in order to better understand what tenants in these areas are looking for and what is driving demand in rental markets..
Co-Founder of TheHouseShop.com, Nick Marr, comments on the newly released data:
“Our annual data shows that London was the area that received the most enquiries on property listings available to rent, followed by Birmingham, Bristol, Leeds and Manchester. The data varied from region to region depending on what our users were looking for, which has helped to build a clearer picture of the rental market in each city.
“This data can be utilised by Buy-To-Let landlords, as they can use it to gain a better understanding of the local rental market for each of the top 5 areas, should they consider expanding their property portfolio in 2018 by choosing to invest in one of these areas.”
“However, the rental market in the UK is extremely fast-paced and changes frequently, resulting in new hotspots developing on a yearly, or even monthly, basis! It’s advisable for landlords to keep an eye on current rental market trends and to re-evaluate their investment portfolio accordingly, in order to take advantage of a new investment opportunity in the next high-demand location.”
When looking at the age of tenants making enquiries in our rental hot-spots, some interesting facts were revealed. Bristol saw the majority tenant enquiries coming from the Millennial demographic with over two thirds, (63.64%) of total enquiries. In comparison, Manchester saw the majority of enquiries from Generation X, (35-50 year-olds) with 71.43% and Birmingham had the highest number of Baby Boomer (51-69 year-olds) enquiries at 34.55%.
London also saw a high number of Millennials (18-34-year-olds), making up over half (50.65%) of enquiries on rental property listings in the city over the year, helping it become the number one area for total enquiries. One possible explanation for this could be the fantastic career opportunities for this age group in the capital. London came in 5th place as a 2017 Millennial Hotspot in a recent report carried out by TheHouseShop.com, which further highlighted the excellent employment opportunities available for young professionals in the city.
Once the data was broken down by property type, TheHouseShop found that there was a marked difference in demand for houses over flats and vice versa depending on the area. For example, London saw a higher number of enquiries for flats at 69.98% whereas visitors making enquiries on a property to rent in Leeds preferred houses at 59.15%. With rental prices at an all time high in densely populated areas like London, renters were more likely to seek out less expensive flats or apartments. Whereas smaller cities like Leeds, where rents are much more affordable, saw higher demand for large houses.
Looking at the data broken down by number of bedrooms, we can see that Leeds has the highest proportion of enquiries for 1 bed studios or flats at 35.92%, followed closely by London with 34.01%. Bristol had the smallest number of enquiries for 1 bed homes with just 21%, or roughly one fifth of total enquiries in the area.
Larger 3 bed homes were most popular in Birmingham with 28.94% of total enquiries, while pricey London saw the smallest number of 3 bed enquiries with just 17.82% – just over half the amoung for Birmingham.
2 bed properties were most popular in Bristol, with almost half of all enquiries (47.48%) made on 2 bed homes.
USING TENANT DATA TO MINIMISE VOID PERIODS
Landlords can use this data to determine which types of properties they should be investing in when targeting these areas. The last thing landlords want is to invest in a property, only to find that there is little demand for this type of home in the local market, and end up struggling to find tenants and experiencing lengthy and costly void periods.
A spokesperson, from The NLA, comments on landlord void periods data for 2017:
“Recent data from the NLA has shown that a third of landlords (33%) have experienced a void period in the last three months which have lasted 64 days on average resulting on serious financial consequences for many Buy-To-Let landlords.”
Landlords can be hit hard by lengthy void periods, as many would struggle to pay the mortgage without any rental income coming through. However, Buy-To-Let investors owning property in our 2017 rental hot-spots will have seen high levels of tenant demand over the past year and should have minimised void periods as a result.
It is important for landlords to remember that the rental market in the UK is constantly changing, and new research is showing that 2017’s rental hot-spots may already be in decline. Therefore, landlords should regularly re-evaluate their investments and always be on the look out for the next up and coming rental hot-spot..