21 Feb Rental property update: guarantor transactions up 25% year-on-year
The latest UK Rental Market Report from Hometrack highlights the chronic issues that private renters are facing. Rental inflation stood at 12.1% per annum over the 12 months to October 2022, representing an increase of £1,400 per year, with “no sign of rent inflation slowing in the short term”. Average earnings, meanwhile, grew by just 6%.
Exacerbating the situation is the fact that demand is running at 46% above average, while supply is 38% lower. Renters in the UK’s largest cities are feeling the pain of inflation the most, with London rents rising by 17% over the period, Manchester rents rising by 15.6% and Glasgow rents by 14.1%.
Despite this rather gloomy scenario, there are still options out there for renters when it comes to accessing the properties they want. The UK’s largest rental guarantor service, Housing Hand, has established a range of innovative partnerships and working arrangements to help ease renters’ pain.
“We’ve known for years that the supply of new housing in the UK hasn’t been keeping pace with demand, which has impacted both those seeking to buy homes and those who are renting. As such, we have been connecting with partners to ensure that services are in place for tenants, letting agents and landlords to take the pain out of private renting. Yes, market forces are turning up the heat, but we are responding by serving more applicants to help manage the situation.”
Graham Hayward, Chief Operating Officer, Housing Hand
Housing Hand’s rental guarantor service works by assuring the landlord that they will receive their rent throughout the duration of the tenancy. From the tenant’s perspective, there are no credit checks, just a mostly automated affordability process – a key attraction in light of referencing getting harder to pass each month, according to the Housing Hand team. Housing Hand approves 98% of all applicants for its guarantor service and works with the biggest network of accommodation providers in the UK, to support tenants to find homes swiftly and easily.
Housing Hand began as a service to help international students rent privately in the UK – something which it continues to do to this day, working with universities and providing a service that is open to all UK and international fulltime students studying in the UK and Ireland. The company works with first year through to postgraduate students, while an extension of its university partnerships means that Housing Hand can also support care leavers and estranged students, should university care teams require this additional service.
Today, Housing Hand also works with a large number of working professionals. Facing an increasingly unaffordable rental market (rent is now at 35% of average weekly earnings for a single person – the highest rate for more than 10 years), renters are turning to rental guarantor services as to help them access the homes they need. Housing Hand has seen an increase of more than 25% year-on-year in guarantee transactions as a result.
