In the last quarter (Q4) of 2018, 40% of the UK housing
stock was private rental, increasing to 50% in cities such as Newcastle upon
Tyne and Manchester, according to a new report from TwentyCi.
The marketing consultancy’s Property & Homemover Report
for Q4 reveals a steady increase in the percentage of rental properties
available over the previous 12 months.
However, the study confirmed an overall property market
slowdown in 2018.
Despite a 4% rise in new instructions year-on-year in Q4,
there was a 1.2% decline in exchanges, with 20% of property sales falling
through, which might explain why rental stock has increased.
Overall, the data suggests that the north-south divide is
very much still in existence, despite higher salaries in the south. For example,
the 25% of highest earners in London will be spending between 40-60% of their
take-home pay on their mortgage to buy a home of equal standing with a 40%
Meanwhile, the 25% of lowest earners in the capital would
not be able to afford to buy a property of equal standing, as it would mean
spending between 70-131% of their take-home earnings on their mortgages.
For the lowest earners, the cost of renting a property of
equal standing would be between 57-90% of their take-home pay.
However, the figures show that there are many locations in
the Midlands and north of England where the 25% of lowest earners can afford to
rent or buy.
In Nottingham, for instance, to rent a home of equal
standing would cost 35% of take-home pay, while buying with a mortgage would
eat up 37% of take-home earnings.
Colin Bradshaw, the Chief Customer Officer at TwentyCi, says: “Q1 2019 and the
outcome of the Brexit process will determine the outturn for the next 12 months.”
a high proportion of private rental properties in the UK housing stock, demand
from tenants looks set to remain high.