In comparison to 2019 figures, there was a decline of 1.1% in Portsmouth rental fees in 2020. When you consider the wide range of challenges landlords and tenants faced in 2020, it shouldn’t be surprised that there has been a cooling off of rental prices in many popular parts of the UK.
A recent study suggests the average rental cost per month fell by 0.8% in 2020. In this respect, Portsmouth was slightly more than the national average, and many locations suffered a more significant drop.
There was a notable drop in London, were rental prices in the capital dropped by 3.4%. In the East of England, there was a drop off of 2.4%, and in the South East of the country, the fall was 1.6%.
The largest drop was in Bournemouth, where rental prices fell by 4.4% in 2020.
Dropping rental fees impact landlords and tenants
Now, while tenants are likely to welcome more affordable rental fees, it isn’t great news for landlords. In the long-run, this might also be bad news for tenants. If landlords no longer find rental fees provide them with sufficient income, they will likely leave the rental market.
This will reduce the supply of rental property, and eventually, prices will rise again, so tenants will pay more in the long-run.
The most important aspect for local landlords is what level of income they need to make it worthwhile to act as a landlord. This doesn’t just mean break even, there should be the scope for a return on the investment a landlord makes.
We help Portsmouth landlords connect with tenants
At MI Home Living, we are pleased to say we have helped many landlords in and around Portsmouth. By ensuring landlords connect with tenants in the most appropriate manner, we ensure you minimise void periods, and enhance your chances of tenants staying in your rental accommodation for longer.
Ben Taylor, a well-known name in the English rental market said; “It’s been a strange year for the rental market and both tenants and landlords have faced challenges posed by the pandemic. The impact of Covid has been more pronounced across the less affordable regions of the rental market. This will have been largely due to lower demand, as well as being influenced by tenant affordability with many struggling financially due to job losses and furlough.
Ben continued by saying; “However, while tenants have seen a welcome reduction in the cost of renting, these regions remain home to the most robust rental costs and this will reassure landlords. Many may have feared a far larger market collapse was on the cards and so far, this simply hasn’t been the case. In fact, in many areas, the cost of renting has actually climbed despite the wider backdrop of a pandemic.”
Ben concluded by saying; “With the vaccine now being rolled out and hopefully some light at the end of the tunnel, we should see market uncertainty settle down considerably throughout the course of this year. Although based on how 2020 turned out, we will believe it when we see it.”
If you are interested in our lettings or property management services in or around Portsmouth, contact MI Home Living today and a member of our team will be happy to help you.