Demand for tenancies with all bills included has jumped 36 per cent in a year, outpacing the growth in requests for any other feature such as a communal garden or pets allowed, according to research from property website Rightmove.
The company surveyed 1,300 landlords to examine at the changing behaviours of tenants against the backdrop of record rent rises and increasing housing bills.
With national asking rents outside London now standing at £1,088 per month, up 11 per cent annually, and rents in the capital up 14 per cent to £2,195, they are rising at the fastest rate ever recorded.
As such, it found that tenants are staying longer in one rental property to avoid facing the surge in prices by moving elsewhere.
It found the majority of tenancies – 63 per cent – last over two years, with just one in five staying for less than a year.
And this could be due to 63 per cent of the landlords polled saying they had kept the rent the same for tenants over the past year. However, the remainder – 37 per cent – said they had increased rents.
Meanwhile, there are more than triple the number of people making rental enquiries per property, which Rightmove said was “making it the most competitive ever rental market”.
It explained the lack of available stock is due to more tenants staying put in longer tenancies, while others who delayed moving during the pandemic are now out in force.
‘Keep a good tenant rather than cash in’
Tim Bannister, Rightmove’s director of property data, said: “A shortage of rental homes and strong demand for the properties available has led to a greater number of tenants choosing to renew their leases and stay put, rather than re-enter a competitive rental market. People who had been waiting to see what happened last year are now being faced with record rents and so are seeking out properties where they can have more certainty over their outgoings, with all bills included becoming increasingly sought after.
“Landlords may have been tempted to put their rents up given the high demand from new tenants, but many understand the affordability challenges of rising rents and bills, as our study shows that the majority are charging their tenants the same as a year ago. Many landlords build up a relationship with their tenants over a number of years, and they will want to keep a good tenant for longer if they can rather than cash in on a rent rise in the short-term.”
Richard Davies, head of lettings at Chestertons, added: “The market is showing a definite trend of tenants extending their rental agreement. Year-to-date to the end of April, we have seen an 11 per cent increase in the number of tenants renewing their contract compared to the same period last year. The reasons vary, with some tenants being worried about the cost of living and wider economic uncertainty which prevents them from taking on an costly move. Others have realised that demand has pushed rents up considerably, which makes staying put financially more viable, especially where they have paid their rent on time and are taking care of the property.
“Another factor are interest rates. Some tenants may have seen their rental situation as a temporary solution to save up for their property purchase, however, the recent boost in interest rates has resulted in house hunters putting their purchase on hold for now.”