The 6% drop in home ownership (with a mortgage or loan) from 8.4 million in 2001 to 7.6 million in 2011 and the simultaneous 6% increase in those renting from a private landlord or letting agency (3.6 million as of 2011) highlighted the ever increasing barriers to home ownership, especially amongst “Generation Rent”, as well as revealing a real shift in the attitudes towards renting in the UK with it no longer seen as just a step on the road to buying but a long term life choice for many.

But what does 2013 and indeed the next decade have in store for the UK rental market? We asked lettings expert and hands-on landlord, James Davis, CEO of Upad, to look into his crystal ball and offer his predictions.

“2012 was another good year for UK landlords in general. The continued lack of access to mortgage financing kept first time buyer levels low and demand for rental accommodation high, especially in the Capital where now almost 1 in 4 people rent. Having said that, new landlords keep to get a slice of the action may too have been negatively affected by the on-going recession, not finding it easy to secure the buy-to-let financing required to start or expand their portfolios.

“We too at Upad had a very busy year with a near 50% increase in the quantity of tenant enquiries during 2012. The average Upad landlord now gets 20+ tenant enquiries per property which might sound wonderful but in reality reveals the extent of competition amongst tenants for rental properties. In fact, I would say that tenant enquiries at this level can also be negative for landlords, almost becoming an irritant for those involved.

“With that in mind I suspect that 2013 will be the year when landlords seek quality rather than quantity when it comes to choosing tenants. Those who will look after their property, pay the rent on time and in full and be responsible renters are sure to be preferred by landlords and I foresee full tenant referencing and rent guarantee agreements becoming the norm in 2013.

“One of the biggest trends we saw in 2012 was a shift in landlord behaviour; the acceleration away from traditional agents to self-managing channels as landlords become more demanding in terms of levels of service and keen to maximise yields. Online classified listing sites, catering for the self-managing landlord have doubled their business in the last 18 months whilst market leading portals such as Rightmove and Zoopla have seen a 10% decrease in stock levels this year as landlords look to ‘go it alone’.

“As more and more landlords do ‘go solo’ however, so the calls for regulation increase. At present neither letting agents nor landlords are required to be regulated putting tenants in often precarious positions and whilst the government has made no official plans for regulation, some such as Boris Johnson and his new “London Rental Standard” scheme, the private renting licence coming into force in Newham as of 1st January 2013 and indeed us here at Upad, are calling for landlords to act more responsibly.

“As a landlord myself, what will I be doing in 2013? Well, as ever I’m keeping a firm eye on interest rates as they are only going to go one way and sooner rather than later I suspect. In terms of expanding my portfolio, I’ll be looking at towns and cities such as Oxford, Brighton, Swansea and Leeds for example but ensuring that I don’t overpay on acquisitions and seek both capital growth and rental income potential.

“Speaking to a number of my tenants, as rents across the UK continue to rise, this is starting to affect the percentage of their salaries spent on rent. There will inevitably come a tipping point where rents will become unaffordable and landlords should be aware of this. Indeed we at Upad have seen landlord confidence fall by 8% since the start of the year and concerns over rent arrears and defaults due to job insecurity and rising rent costs coupled with increasing mortgage payments are very real for today’s landlord.

“If I was a tenant? Well with the level of competition in the marketplace at present, I would do everything within my power to present myself as the optimum tenant. Ensure a clean credit history, be presentable, genuine and responsible. I would build a relationship with the landlord based on trust and transparency and at all times be honest about my situation. It’s not all a one-way street however as due to sheer volume, tenants in the UK have an ever louder voice, just make sure you use it wisely.

“So as we end another hectic year at Upad HQ, having let over 5,000 properties and generated over 120,000 tenant enquiries, we welcome 2013 with our eye wide open to the issues faced by both landlords and tenants.”

For more information or expert comment from James Davis, please contact Upad today on 0333 240 1220 or visit www.upad.co.uk