The rental market has seen significant changes in 2024, particularly in how rent increases have affected renewing tenants compared to new tenants. A report by Hamptons Lettings Agency has highlighted how the gap between new and renewed tenancies has shifted.
Increasing Rents and Market Trends
Back in April 2018, new tenants paid just 1.1% more than renewing tenants. Since then, open market rents have risen by 38%, whereas rents on existing tenancies have increased by 21%. This has created a notable disparity between what new tenants and renewing tenants are paying for their homes. In response to this, the rents of renewing tenants have seen an increase since the start of 2024. This year, 61% of landlords managed to secure higher rents with new tenants, while a notable 88% of landlords who renewed contracts with existing tenants also obtained higher rents. On the tenant side, renewing tenants are facing 8.3% rises in rents, whilst new tenants saw a smaller increase of 6.4%. This trend highlights a catch-up effect, where the rents for renewing tenants begin to align more closely with current open market rates. Despite this catch-up, renewing tenants are still paying 13.4% less than those entering new contracts.
Tenant Mobility and Financial Impact
Insights from the Deposit Protection Service (DPS) have revealed that tenants are facing challenges in moving home. This is likely due to the wide gap in rents for new and existing tenancies that still remains. Among 1,000 surveyed tenants, 45% found it ‘very difficult’ to move, an increase from 39% in March 2023. The average tenancy length has extended to 924 days, up almost 7 months from 706 days in 2020, demonstrating a growing reluctance to move amidst financial constraints. Moreover, 64% of those who did move had to make significant financial sacrifices, emphasising the economic pressures faced by renters.
Utilising RENT+
Regardless of whether you are managing new or renewing tenancies, the RENT+ software serves as a complete software package for all your property management needs.
For existing tenancies, leverage the rent reviews feature to automate tenant rate adjustments, and monitor payments with precision and ease. Access the entire history of each tenant with their individual diary and job file. These features allow you to find all the historical information you may need, ensuring you manage your tenants with maximum efficiency. With increases in rent come increases in management fees, which can be visualised both by landlord or by property, allowing RENT+ to cater to your bespoke business needs. Generate detailed reports on commissions to track how much your business is making, and analyse where your income streams are coming from, giving you full control over your financial performance.
When approaching new tenancies, utilise the applicant file to track all potential tenants. Make use of the advertisement features that facilitate RTDF uploads to major property portals to seamlessly synchronize your property listings in real-time, ensuring your properties are promptly showcased to a vast audience of potential tenants. Alongside this, make use of deposit features to efficiently track tenant deposits, providing a smooth experience from the start of the tenancy to the end. With landlords achieving a greater income, the opportunity of increasing their portfolios becomes more viable. As their landlord statements become more extensive, rest assured that with RENT+ Version 43, you have the option of producing one landlord statement for the entire portfolio, or a statement per property. This option offers a more detailed asset analysis for you landlords.
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