Harrogate rental market hits crisis point due to low inventory and high house prices

Rental agents are seeing increased demand for accommodation in the city, despite the average monthly rent reaching £974.

Guy Wigginton, director of R&W Lettings in Harrogate, said: “The rental market is absolutely ballistic at the moment.

“We had a property last week with 30 viewings in the first days of listing. There is not enough availability at the moment.

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“The prices are exorbitant. There’s not much change from £1,000 for a three-bed semi-trailer, and even for a two-bed terrace renters are looking at upwards of £750 a month. For a detached four bed you are talking about £2,500 rent per month. I don’t think the rising cost of living, fuel costs, etc. have still really hit people – people are still desperately looking for properties.

Yorkshire and the Humber will need almost 12,000 new private rental units a year to meet their housing needs, according to a new report.

The report – by Capital Economics for the National Residential Landlords Association – says that if owner-occupied housing and social rental housing in the UK continue at their ten-year average growth rate, supply from the private rental sector in the area is expected to increase by 11,900 properties. per year to meet government targets.

Additional survey data from research consultancy BVA-BDRC suggests that across the region, 75% of private landlords saw an increase in demand for rental accommodation in the last quarter of 2021. This increase was 63%. % compared to the previous quarter.

Meanwhile, the private rental sector is coming under increasing pressure from a range of government policies that are making the sector less attractive to potential investors and current owners. These policies include tax changes for Buy to Let owners; changes to stamp duty property tax which discourage the purchase of additional properties; reducing capital gains tax on non-property assets to incentivize investment in assets away from the rental sector; and a ban on leaving agent fees to tenants, a cost that could be passed on to landlords.

As a result, government figures show the supply of private rental accommodation in Yorkshire and the Humber has fallen by 15,000 over the past five years.

An increase in short-term rentals, such as AirBnB, has also led to a shortage in the long-term rental market.

Capital Economics explains how, in order to meet housing supply targets, the Treasury must encourage investment in the sector.

This includes the increase in the rate of new construction and the shift from commercial ownership to residential use. The report also highlights the contribution the sector can make by shifting stock from short-term rentals to long-term rentals and bringing empty homes back into use.

Mr Wigginton added: ‘We are building a lot of houses in Harrogate, but I don’t know how many of them are classed as affordable, and they are all for buy rather than rent. It would be nice if this problem could be solved.

In Harrogate, there are just 179 homes available for private rental – yet Harrogate Borough Council has around 1,800 households currently on its waiting list for accommodation. And in Ripon, there are just 45 rental properties up for grabs, at an average monthly rent of £740.

As well as government policies, the increased demand can also be partly attributed to the current state of the sales market – the average property price paid for in Harrogate last year rose to £395,526.

This represents an increase of £34,000 on last year, with Harrogate now the 35th most expensive postcode area out of 105 areas in England and Wales. The city is also seventh out of 21 local authorities in Yorkshire and the Humber with price data for annual growth.

The National Residential Landlords Association report says rising house price-to-income ratios and tighter lending conditions have made it harder, especially for first-time buyers, to buy a property.

Mr Wigginton said: ‘One of the issues is the market price of sales, and that interest rates have been historically low in recent years – we’ve seen people saving for a deposit for a house, they had £30,000 and suddenly they find they need £30,000 more for a similar property. They can’t afford to buy. This has a ripple effect on the rental market.

Ruth Millington, Yorkshire and Humber representative for the National Residential Landlords Association, said: “As demand for private rental properties continues to rise, tenants in Yorkshire and the Humber will struggle to find the homes they need. need and can afford as supply continues. to fall.

“In recent years, we have repeatedly warned the government of the impact of its policies. These figures show the urgent need for a different approach to stimulate the growth of the private rental sector in the region in order to provide the accommodations that people want and need.

About Vicki Davis

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