Considering official figures show wages are now growing at their highest level in a decade, alongside record levels of employment and continuing net migration, demand will continue to climb, paving the way for rising rents as we ease into the new year.
The housing market remains robust and the underlying strength of demand for rental properties is not only good news for landlords, but also a positive indicator for the UK economy.
However, more must be done to address the supply and tackle the national housing shortage, also one of the most pressing unresolved issues of last year.
Government shifts towards private rental sector
The nation’s chronic lack of housing is a problem that persists, regardless of the current political uncertainty, and will only deteriorate as both employment figures increase and migration levels show minimal change.
Indeed, UK employment levels have consistently performed well, and last year has been no exception, with the employment rate increasing from 75.1% to 75.5%. This is equivalent to an increase of 289,000 more jobs.
Similarly, between June 2017 and 2018, the UK had net migration levels of approximately 273,000. This is broadly in-line with the previous year and highlights the continued resilience of the economy, despite ongoing Brexit talks.
While a seemingly obvious solution is to build more houses, tax relief should also be awarded to property owners looking to increase the supply of housing through refurbishment.
More than simply having enough properties to meet demand, it is important that all buy-to-let properties are in a condition suitable for renting. This kind of government support for landlords is key to managing the housing issue in 2019 and beyond, especially as the demand for rental accommodation continues to rise.
Recent endeavours to professionalise the buy-to-let market also demonstrate the shifting attitude of the government towards the private rental sector (PRS), as well as a recognition of the growing economic importance of the private rental market.
Improving rental situation to increase UK tenants
This year will be unique as one of the stand-out years where we begin on a political cliff-hanger. Considering recent Brexit negotiations, the government is aware of the necessity to tread the landscape carefully and avoid making any blunt policy changes that could be irresponsible or perhaps even serve to slow the rental market further.
However, the significance of the rental landscape will mean impending housing discussions will focus on ways to improve the rental situation for the increasing numbers of UK tenants.
The buy-to-let market has experienced its fair share of slumps and successes over the past few years and 2019 will likely continue to deliver more challenges to the sector.
However, the role of the PRS in the economy will grow and this will be reflected in the continued professionalisation of the sector, as well as the increase in rental demand. Alongside a plan to tackle the pressing issue of the housing shortage, greater government support for responsible landlords in the PRS will do much to improve the market, but also the wider UK economy, as a whole.