Demand, Pricing & Investment Potential

The rental market in West Lancashire has experienced notable changes in recent years, reflecting broader trends in the UK’s housing sector. This article delves into the current demand, pricing, and investment potential in the region, offering insights for landlords and investors.

Rising Rental Demand

West Lancashire has seen a significant uptick in rental demand. Factors such as increased mortgage rates have made homeownership less accessible, leading more individuals to seek rental accommodations. This heightened demand has resulted in properties being let more quickly, with many tenants competing for limited availability.

Escalating Rental Prices

Corresponding with the surge in demand, rental prices in West Lancashire have risen substantially. As of January 2025, the average monthly rent reached £711, marking an 11.5% increase from £638 in January 2024. This rise outpaces the North West region’s average rent increase of 9.7% over the same period.

Property Types and Rental Yields

The composition of rental properties in West Lancashire is diverse:

• Three-bedroom houses: Comprise 52.8% of the rental market, with an average rent of £662 per month.
• Two-bedroom properties: Account for 28.3% of rentals, averaging £632 per month.
• Four or more bedrooms: Make up 11.3% of the market, with rents averaging £983 per month.

Given the average house price of £232,000 in December 2024, investors can anticipate rental yields ranging from 3% to 5%, depending on the property type and location.

Legislative Developments Impacting Landlords

The Renters’ Rights Bill, expected to become law by autumn 2025, introduces several measures affecting landlords:

• Ban on no-fault evictions: Landlords will need valid reasons to terminate tenancies.
• Rent increase limitations: Increases will be restricted to once per year.
• Prohibition of rental bidding wars: Preventing competitive bidding among prospective tenants.

Additionally, landlords must address emergency maintenance issues, such as mould, within 24 hours under ‘Awaab’s Law’. These changes aim to enhance tenant protections but may also influence landlord strategies and the overall rental supply.

Investment Potential in West Lancashire

Despite regulatory shifts, West Lancashire presents promising investment opportunities:

• Strong rental demand: The consistent need for rental properties ensures steady occupancy rates.
• Competitive property prices: With average house prices lower than the national average, entry costs for investors are relatively affordable.
• Attractive rental yields: The region offers yields that are competitive with other parts of the UK, making it appealing for buy-to-let investors.

Investors should conduct thorough due diligence, considering both market conditions and upcoming legislative changes, to make informed decisions in this evolving landscape.

PR Crisis Signals Mass Exodus of Private Landlords

The UK’s private rented sector (PRS) is facing an escalating crisis, as a recent survey highlights plummeting landlord confidence and mounting pressures on tenants. According to the Total Property survey, 67% of landlords believe conditions have significantly worsened, while nearly half (49%) plan to exit the market within the next five years.

Landlords Losing Confidence Amid Regulatory Shifts

The survey, which gathered insights from 3,500 landlords, tenants, and agents, underscores the growing strain within the sector, particularly in response to impending legislative changes under the Renters’ Rights Bill.

A striking trend is the lack of new investment in the sector. While only 3% of landlords are newcomers, a dominant 75% have been in the market for over a decade. Eddie Hooker, chief executive of Total Property, warns that the PRS is undergoing one of the most transformative periods in decades:

“Rising costs, increasing regulation, and shifting tenant expectations are reshaping the market. With nearly half of landlords considering leaving the sector or reducing their portfolios, and tenants struggling with affordability, urgent action is needed.”

Hooker also highlights the decline in new investors, describing it as a clear warning sign:

“The fact that so few new landlords are entering the market shows where we’re heading. Unless conditions improve, we risk an exodus that will severely impact rental supply.”

Regulatory Burdens Driving Landlords Away

For landlords considering an exit, regulatory changes remain a leading concern:

• 29% cite the abolition of Section 21 ‘no-fault’ evictions as a key reason for leaving.
• 24% point to the Renters’ Rights Bill as a factor in their decision.
• 33% find compliance requirements overwhelming, particularly as costs continue to rise.
• 19% cite rising operational costs, while 15% are concerned about tax changes.

While Hooker acknowledges the need for stronger tenant protections, he warns that the current approach is driving landlords out of the market, ultimately harming tenants:

“Regulation must strike a fair balance between protecting tenants and ensuring landlords have a reason to stay in the market. Without this, we face a crisis where tenants struggle to find homes they can afford.”

Tenants Struggle with Rising Rents and Supply Shortages

The affordability crisis is hitting tenants hard, with 88% citing rising rents as their primary concern. The shortage of available properties only worsens the situation, affecting 49% of renters.

Despite these challenges, 64% of tenants still report feeling secure in their current homes. However, issues such as the right to request a pet—one of the key proposals of the Renters’ Rights Bill—rank low on tenants’ priority lists, with just 6% considering it a crucial change.

Letting Agents Struggle with Compliance and Supply Issues

Letting agents are also feeling the strain, with:

• 76% citing compliance with new regulations as a major challenge.
• 61% struggling with a shortage of rental properties.
• 73.5% expressing disappointment in the government’s lack of support.

The Future of the PRS: Urgent Action Required

The findings paint a concerning picture of the PRS, with landlords exiting, new investors hesitant to enter, and tenants facing rising rents with fewer options. Without policy adjustments that support both landlords and tenants, the UK risks an even greater rental supply crisis in the years ahead.

Over the past year, more than 60% of all homes entering the market achieved an Energy Performance Certificate (EPC) rating of C or higher. This positive trend reflects the growing emphasis that buyers, tenants, and housebuilders are placing on energy efficiency and performance ratings.

This insight comes from research conducted by epIMS, a leading platform dedicated to EPC and energy efficiency. The study examined homes sold, rented, or constructed in England and Wales between Q4 2023 and Q3 2024, assessing how many held an EPC rating of C or above. For context, these figures were compared to data from the previous 12 months (Q4 2022 – Q3 2023).

The findings revealed that 60.2% of homes in the last year maintained an EPC rating of C or above, marking a notable increase of 1.6% compared to the prior year. London stands out with 64% of its homes achieving a C rating or better, the highest proportion across all regions. Following London, the North East recorded 61.8%, the South East and North West each reached 61.5%, and the East of England secured 61.4%.

Craig Cooper, Chief Operating Officer at epIMS, commented on the latest data, expressing enthusiasm about the heightened awareness of EPC ratings among prospective tenants and buyers. He emphasized, however, that an EPC rating alone does not fully capture a home’s eco-friendliness. Cooper highlighted that the A to G rating scale may not provide a comprehensive picture of a home’s overall energy performance, underscoring the need for a deeper understanding of what truly makes a home sustainable.

“For example, Air Source Heat Pumps are an environmentally friendly way of heating a home but provide less of a boost to the EPC rating than an efficient traditional gas boiler,” said Mr Cooper. He further added, “True understanding of a home’s energy efficiency is only available when you study the EPC score on a much closer level, which means knowing how numerical EPC points accumulate to create the overall letter rating. This is how you get a full picture of a home’s energy efficiency and, more importantly, the steps required to improve it.”

In summary, while the increase in EPC ratings is encouraging and signifies a positive shift towards more energy-efficient homes, it is important to recognize that EPC ratings are just one aspect of a home’s environmental impact. Continued education and comprehensive assessments are essential for achieving truly sustainable living spaces.