In today’s unpredictable economic climate, both tenants and landlords in Hertford and the wider UK rental market are adapting to a rapidly changing landscape. Rising rents, cost-of-living pressures, and a softening rental demand are reshaping preferences for tenancy agreements, with a growing emphasis on stability and flexibility. This blog explores these trends and offers insights from Abel Living, a leading property management agency based in Hertford, specialising in guaranteed rent schemes and social housing solutions.
Economic uncertainty is driving a significant transformation in the rental market. According to the latest Lettings Report by Leaders Romans Group (LRG), both landlords and tenants are showing a strong preference for longer-term agreements, with 44% from each group favouring one-year fixed-term contracts. Additionally, 37% of tenants and landlords are exploring periodic tenancies, which offer the flexibility to adjust agreements without fixed end dates.
The driving force behind this trend is economic uncertainty. As the Office for National Statistics reports, average UK private rents increased by 8.4% in the 12 months leading up to September 2024, with London experiencing a sharper rise of 9.8%. These figures reflect affordability challenges that encourage tenants to secure longer agreements to lock in rates and avoid future increases.
At Abel Living, we’ve observed this trend play out locally. Hertford landlords are increasingly recognising the benefits of fostering tenant loyalty and offering stability. With rental inflation slowing to 5.4% in September 2024—its lowest in three years, according to Zoopla—landlords are pivoting their strategies to retain tenants amidst fluctuating demand.
Strategies we’re seeing include property upgrades, with around 30% of landlords nationwide investing in improvements to enhance tenant satisfaction and retention. Approximately 15% of landlords are offering competitive rates or temporary discounts to incentivise long-term occupancy. A smaller yet significant proportion (6%) are introducing adaptable agreements that cater to tenant needs. Hertford, with its desirable location and close proximity to London, remains a sought-after rental destination. However, as affordability concerns grow, landlords in the area must balance competitive pricing with quality offerings to attract and retain tenants.
While the shift towards longer-term agreements signals a move towards greater stability, the broader rental market is not without challenges. The Royal Institution of Chartered Surveyors (RICS) highlights a deepening rental crisis in its October 2024 report, with supply falling short of demand. This supply-demand imbalance is particularly evident in regions like Hertford, where high demand for rental properties persists despite affordability pressures. Nationally, some landlords have responded to slowing rental demand by reducing rents. However, this strategy is not always sustainable, particularly in areas where rental yields are critical to covering mortgage costs.
At Abel Living, we understand the challenges landlords face in today’s rental market. Our Guaranteed Rent Scheme offers landlords financial security by providing a fixed monthly income regardless of occupancy or tenant payment status. This scheme not only eliminates the risks associated with void periods but also aligns with the growing tenant preference for longer-term agreements. Through our tailored property management services, we help landlords maintain high-quality properties to attract long-term tenants, navigate tenancy negotiations to achieve mutually beneficial agreements, and stay ahead of market trends with expert advice and support.
Our social housing solutions also address the supply challenges highlighted in the RICS report. By partnering with local authorities, we help meet the demand for affordable housing while offering landlords a reliable income stream.
From a tenant perspective, the appeal of longer-term agreements is clear. Securing a fixed-term contract not only locks in current rental rates but also provides peace of mind in a volatile market. This trend is especially prevalent in Hertford, where many tenants seek to establish roots in a community while avoiding the disruption of frequent relocations.
Allison Thompson, National Lettings Managing Director at LRG, aptly notes that “flexibility and incentives are emerging as key factors in tenancy negotiations.” This sentiment rings true in Hertford, where tenants and landlords are finding common ground through innovative approaches to rental agreements. For tenants, this might mean accepting slightly higher rents in exchange for added security. For landlords, it could involve offering incentives such as furnished properties or periodic rent reviews tied to market conditions. These strategies highlight the importance of adaptability in maintaining positive landlord-tenant relationships.
Despite challenges, the Hertford rental market offers significant opportunities for both landlords and tenants. By prioritising stability, flexibility, and quality, landlords can navigate economic pressures while fostering tenant loyalty. At Abel Living, we’re committed to supporting landlords through these transitions, offering solutions like guaranteed rent schemes and expert property management services.
If you’re a landlord in Hertford or the surrounding areas, get in touch with Abel Living to learn how we can help you thrive in today’s evolving rental market.