Divisions in the market
This reflects a wider division in the market between needs based renters looking for small or medium sized housing in an urban environment and 'big budget tenants' looking for trophy properties, who remain relatively scarce.
Accordingly the market is dominated by affluent young couples unable or not looking to buy and families new to the area. This latter group tends to comprise those relocating for work reasons or moving for lifestyle reasons and renting before committing to a purchase.
Demand from the latter group has tended to favour towns with good schools, such as Harpenden, Winchester and Cambridge, while being more reluctant to rent in surrounding villages. As such, the emergence of prime urban markets has been a common feature across both the sales and rental market.
Outlook
Looking forward, we expect the preference for prime family housing in the suburbs and key commuter towns to continue, particularly as we see a more meaningful increase in those following the traditional relocation routes out of London.
Once the uncertainty resulting from a general election year subsides, this is likely to create additional demand in both the sales and lettings markets, while also potentially reducing levels of supply of rental stock from accidental Landlords.
Across the prime commuter belt markets as a whole we expect rents to rise by 15.9% over the course of the next five years.
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