According to research conducted by Accommodation for Students, levels of confidence in the rental market have not changed since last year. On the contrary, this year 4 out of 10 respondents reported no change in their confidence in the student rental market compared to 2013. An almost equal number reported feeling less confident and 12.8% stated that they were feeling considerably less confident in the prospects for the market in the coming year.
The research found that the size of a property portfolio had an impact on the amount of confidence in the market. For example, those with larger portfolios were more likely to report a decrease in market confidence. This might be due to the fact that they have a greater number of properties to let and face a potentially more challenging task in finding tenants, particularly in terms of resource and time constraints.
Evidence for this assumption can be found in the research, which discovered that more landlords reported a decrease in market confidence (43.3%) than letting agents (33.3%). Letting agents have greater resources at their disposal to let a portfolio of properties than landlords, who may also be relatively new to the private rental market.
It’s not surprising, therefore, that those landlords and letting agents who failed to let their full portfolio in 2013 felt fairly gloomy about market prospects in 2014. Over half reported a decrease in overall market confidence, while 42% felt considerably less confident.
There also appears to be a link between confidence in the market and increases in rent. Those who reported increasing their rents for 2014 felt up to two times more confident about the market this letting year.
Perhaps surprisingly, the respondents who reported increasing their rents for the year also experienced a higher letting success rate for 2014. In spite raising rents for all of their properties, 100% of respondents who did so reported a better letting success rate this year, with 89% of respondents reporting a similar trend after increasing rents on some of their properties.
Overall, therefore, confidence in the UK private rental market appears to have remained constant since last year. Where confidence has increased, it has coincided with well-judged increases in rent which have not had an impact on a respondent’s ability to let out their entire portfolio. In general, however, the steady and reliable stream of student tenants has probably contributed to respondents reporting no real change in their level of confidence in the student market.