What to expect from the private rented sector in 2023 (Part 1: The market)
In this two-part blog series, our Lettings Manager James Gwynne shares his current assessment of the private rented sector (PRS) and what to expect in 2023. In part one, he looks at the market.
Three prime ministers. Two housing ministers. One cost-of-living crisis, and plenty of post-Truss budget market turmoil. There’s no denying that it’s been a substantive year in politics. Assuming that there are no further major upheavals, here at Nicol & Co we anticipate 2023 to be a more settled year.
However, the last 12 months have undoubtedly had an impact. In the first of two blogs, I’ll be looking at what to expect from the PRS in 2023 and specifically, the market.
A strong finish to 2022
Demand from tenants remains very high. For example, September 2022 in our Droitwich office saw us match 112 applicants on a per-property basis.
In terms of rents, the Office for National Statistics (ON
S) suggests that year on year in the month of November, rents were up 3.5% nationally and 4% locally. They also demonstrated consistency in percentage increases over a 15-month period pointing to a sustained long-term trend.
What to expect in 2023
As a result of changes in mortgage rates which are taking time to come down after the mini-Budget, fewer tenants are entering the sales market at present, making the decision to stay put instead. That means on average tenants are likely to stay longer in properties.
Together with longer tenancies, the upward trend in rents looks to continue. In a recent report from JLL, they suggest that by 2027, rents will be up 15.9% on where they are at present.
With all this in mind, 2023 could be a good, steady year for the rental market, offering a great time to be in the sector for landlords both looking to invest and already invested in the right way.
Additionally, with the volume of tenants in need of property only growing, it’s a great opportunity to provide assistance to others in difficult times.