What can renters expect in 2023?

The property market is constantly changing and evolving. Staying up-to-date with new rights, rules and regulations is important for both landlords and tenants.

 This blog post will discuss changes the rental market may expect in 2023, from new technologies to shifting rental laws.

Demand for rental housing keeps growing

In the UK, house prices may be falling, but rents remain at record levels.  Average rents across the UK were up 10.8% annually in December 2022. A buy-to-let investor or landlord might consider that a nice little income, but single tenants may now pay as much as 35% of their income in rent.

 Due to demographic shifts, increasing housing prices, and tax hikes deterring landlords, the demand for rental housing is expected to increase significantly by 2024. Simply put, there isn’t enough property to meet rental needs.

 As a result, due to a shortage of rental properties in the private and social housing sectors, prices in the private rental market are rising, and bidding wars are common.

Aspiring first-time buyers continue to rent

First-time buyers are being priced out of the market by the cost of living crisis, which puts pressure on household budgets. Many first-time buyers are expected to stay longer in rented accommodation because of the rising cost of living and high mortgage rates.

Some would-be first-time home buyers may decide to stay renting longer if they cannot afford the property they want to buy or if they are waiting for the market to level off before proceeding.

This increased demand will likely continue driving up rental rates nationwide as landlords try to cover their increased mortgage costs. Approximately 5 million households rent privately, according to the 2021 Census, and this number isn’t going to drop anytime soon.

Rental laws for eviction are changing

The rental legislation in the UK may undergo significant changes in 2023. Government proposals in the Renters’ Reform Bill is claiming to offer tenants more protection and create a fairer  Private Rental Sector. The government believes these PRS reforms are the most sweeping in 30 years.

Most legislative proposals focus on landlords who provide unfit homes. Landlords will soon be prohibited from evicting tenants without giving any reason under Section 21 of the Housing Act. Due to this change, landlords will need to rely on section 8 notices to evict tenants and provide a valid reason for doing so.

 A fifth of private renters who moved in 2019 and 2020 did not end their tenancy by choice, according to the Government, and faced these “no-fault” evictions. Valid reasons for evicting a tenant include rent arrears, property damage, and nuisance complaints.

Periodic tenancies may become the new normal

The Government is planning for all tenants to be moved onto a single system of periodic tenancies, which do not have fixed end dates and are sometimes called rolling tenancies. 

It is proposed that tenants will need to provide two months’ notice when leaving a tenancy, ensuring landlords can recoup the costs of finding a tenant and avoid lengthy void periods.’

 Periodic tenancies will significantly impact agents and landlords since a tenancy can end only if the renter decides to end it, and renters can move sooner if their circumstances change.

Pet rules may change

If the new Bill is enacted, the right to have a pet will now be available to more renters. According to Government data, only 7 per cent of landlords advertised their properties as pet-friendly in 2020. Despite these statistics, up to 35 per cent of tenants looking for rental properties own pets. In the wake of the pandemic, tenants began working more from home and sought pet companionship, but now lockdown restrictions have ended, this trend has continued.

Pets may be allowed by default in the new Government’s model tenancy agreement, which is still in the works. Of course, tenants should be legally obligated to pay for any damage their pets cause.

Rent increases may become more difficult

Even though rents are currently increasing, for the first time, tenants will be able to challenge excessive rent increases through a first tier tribunal. Government plans to end the use of arbitrary rent review clauses, which will prevent landlords from raising rents unjustifiably and allow tenants to be refunded rent for unfit homes.  

Families with children and those on benefits cannot be denied

Families with children or those receiving benefits will no longer face blanket bans and discrimination when applying for rentals. In addition, families with lower incomes can see their benefits paid against the setting up a private tenancy agreement.

 Under the new system proposals, landlords may be able to request that Universal Credit Payments are paid directly to them to cover rent arrears in instalments.

The Government has stated that the Renters’ Reform Bill will be introduced during this Parliamentary Year which ends in May, 2023.

New technologies are arriving

One trend that has been growing steadily in recent years is the use of technology when searching for rentals. From virtual tours to 3D home modelling, more and more landlords are using tech-driven solutions to attract potential tenants.

This trend is expected to continue into 2023 as new technologies are developed to allow renters to book viewings, sign leases, and even pay rent without ever having to step inside a property. 

 In conclusion, renters should expect many changes in the property market during 2023—from emerging technologies that make renting more accessible than ever due to stricter rental laws designed with tenants’ rights in mind.

Here at Progressive Lets, we keep you up to do date with all new developments in the property world affecting landlords and tenants. We can also assist you with any aspect of letting property in Peterborough and the surrounding areas. To find out more, please contact us today.

We have an extensive service for landlords, and offer an Advanced Rent Option, which you can view here.