Supply-Demand Imbalance Continues in UK Rental Market
According to Propertymark, there is still a significant imbalance between the UK’s supply of private rental properties and the ever-growing demand from tenants.
The property membership body released its monthly Housing Insight Report, looking at the trends during September 2023. The results come from a survey of Propertymark member agents, making up around 100 sales and 100 letting agents nationwide. It also references third-party data from the Bank of England, the Office for National Statistics, and other reputable sources.
The report contains information about both buy-to-let properties for sale and lettings.
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Stock Levels of Rental Properties ‘Remain Challenging’
The report’s residential lettings section reveals that although prospective tenant numbers decreased slightly, this can be attributed to seasonal fluctuations.
It has had little effect on the continuing supply-demand imbalance, as the level of supply is still far below the amount needed to match the level of new applicants registered at the member branches.
This undersupply is best demonstrated by comparing the number of rental properties on the market with the amount of rental applicants.
The average number of new prospective renters registering at each branch per the number of properties available has remained very high. This figure has stayed between 10 and 11 prospective tenants per property during July, August, and September this year.
This imbalance continues to exert pressure on rents, and 52% of surveyed members for the report indicated that rents had risen in their branch during September. 42% answered that rents had stayed the same, and just 4% reported a fall, and 2% responded that they didn’t know. This report has confirmed what we already knew, that rents across the UK have been increasing at a brisk rate never seen before.
Void periods have increased marginally from 2.3 weeks the previous month to 2.6 weeks in September, but Propertymark’s Housing Report notes that this is in line with the 5-year average and ‘within normal parameters’.
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Is This Trend Set to Continue?
There hasn’t been much change in the average number of rental properties available at the member branches over the past 12 months, staying at about 11 properties per branch. This suggests the undersupply trend has been an unshakeable fixture in the UK property investment market in the past year, with very little change in the figures month-to-month.
In the absence of concrete plans to tackle this from the government, various experts predict that demand will continue to outpace supply. This means rental demand will remain high, and rental growth will likely continue rising rapidly.
This is good news for buy-to-let investors who rely on high tenant demand and good rental growth to get the most out of their property investment.
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