The dynamics of Leicester's property market, especially in the realm of rentals, have been in the spotlight recently. Both landlords and tenants find themselves navigating an evolving landscape, with challenges and opportunities alike. Let's dive into the specifics and explore how Danvers Estate Agents are helping landlords and tenants navigate this changing tide.

In the backdrop of a nationwide housing shortage, Leicester's rental sector faces its own set of challenges. The demand for rental properties has surged, fuelling discussions around affordability and market dynamics. As the average UK rent escalated from £1,381 in 2021 to £1,706 in 2023 (a 23.53% increase), it's evident that the issue is far-reaching.

Zooming in on Leicester, the average rent for new listings was £823 per month in 2021, rising to £967 per month in 2023 (Leicester area LE1-LE9, LE19). This has raised eyebrows, leading some to question the motives of landlords. But let's peel back the layers.

Notably, this upward trend in average Leicester rent pertains to new tenancies, not renewals. The distinction between these is essential. A new tenancy marks a fresh tenant moving in, while a renewal is when an existing tenant extends their lease with the same landlord.

Intriguingly, government data dispels the notion of widespread profiteering. A significant proportion of landlords (64%) have maintained their rents, and 4% have even lowered them during the mortgage crisis, demonstrating a commitment to their tenants.

Analysing the same data, it's revealed that among landlords setting rents for new tenants, almost half (45%) increased the rent compared to the previous tenant. Meanwhile, a third (35%) maintained the rent, and a surprising 8% lowered it. This translates to an average growth rate of 17.5% for new tenancies, but a mere 4.9% across all tenancies in Leicester.

Contrary to public perception, landlords' profit margins have dwindled due to factors like rising mortgage rates and limited tax relief, rendering the idea of profiteering misguided. The reality is that landlords are grappling with rising costs, compounded by a tax system that discourages investment in the rental market.

With these complexities, landlords often face a dilemma – leave the rental sector, increase rents, or absorb mounting costs. The latter, however, is a tall order for most individual landlords. This scenario necessitates government support to ensure the rental market's vitality.

To alleviate renters' burdens, the government's approach to taxation needs a fresh evaluation. The goal is to maintain a steady supply of rental properties, preventing further market decline that would adversely impact Leicester's tenants.

Without proper governmental backing, both renters and landlords are caught in a challenging predicament. The pivotal role of housing cannot be understated. It's time for proactive measures that strengthen the private rental sector and foster an environment conducive to investment and growth.

Danvers Estate Agents stand as a beacon of support for both landlords and tenants. With expert insights and a commitment to excellence, we guide landlords through the complexities of property management and a sound return on investment. We also support tenants to find the right property that meets their needs and budget.

In the ever-evolving world of rentals, let's collectively steer towards solutions that support both landlords and tenants. It's through collaborative efforts that we can transform challenges into opportunities and create a rental landscape that benefits everyone.