62% of Buy to Let Landlords Report Increase in Tenant Demand
Jason Smithwick
RWinvest Property Writer
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In the midst of the current economic climate, the demand for rental properties has seen a significant upsurge, latest studies show.
A recent 2023 Landlord Report has seen 62.24% of buy-to-let landlords state they have experienced an increase in demand for their rental properties over the last 12 months.
The research comes courtesy of specialist property finance broker Finbri where an associate has highlighted how owing to the “continued instability of the mortgage market and the UK economy, rental property demand is rising. Due to prolonged uncertainty, first-time buyers are postponing entry into the market.”
Landlords in Central London report even higher figures – with an astonishing 94% of landlords reporting increased demand according to a survey undertaken by specialist buy-to-let lender Paragon Bank.
In turn, rooms in HMO’s (housing in multiple occupation) have seen their rents reach record heights as tenant demand far outweighs supply. SpareRoom outlined how tenant demand hit a nine-year high last August – which corresponds to the wider rental market witnessing a 23% year-on-year growth in demand for rental properties.
This heightened demand shows no sign of slowing down anytime soon as tenants withhold trying to get onto the property ladder at present. In fact, three-quarters of tenants in Finbri’s survey believe they will not own property in 2023 – meaning renting is more likely.
Supply-Demand Imbalance
A shortage in the UK’s rental stock has led to landlords struggling to meet demand – which has been exacerbated by the cost-of-living crisis.
The rapid rise in tenant demand can be attributed to such a shortfall – with a 53% increase in tenant enquiries compared to pre-pandemic levels. Rental prices are forecast to rise by over 5% across the coming year if such imbalance continues.
A survey of 1,000 UK renters has identified an array of barriers into renting a property – these have included:
- 45% of existing tenants being subject to rental price increases
- 06% experiencing high deposits
- 86% highlighted a lack of properties on offer in their preferred location
- 08% reported increased competition over the asking price
- 49% were unsuccessful in securing a viewing
Such figures highlight the soaring demand for rental properties that landlords should stay aware of as it becomes increasingly essential that they provide much-needed accommodation to cater to this demand.
Are Landlords Staying in the Market?
Ultimately, the high demand for properties means that landlords should feel an incentive to continue investing in the property market. Out of those surveyed this rings true – nearly half of landlords surveyed in the Landlord Report have stated that they believe it is a good time to invest in the UK property market.
On top of this, 45% of landlords answered that they plan on investing in more property in 2023.
Whilst it has been suggested that house prices may fall by a minimum of 5% over the coming year, there is potential for further investment opportunities due to the increase in demand for rental properties. This means 2023 is a good time for investors to diversify their property portfolio and accumulate further gains.
Invest Now
The sharp rise in tenant demand means that 2023 could serve as the year potential property investors are able to make lucrative gains from the array of potential investment opportunities on offer.
At RWInvest, we pride ourselves on our extensive portfolio of successfully completed developments, and with over 18 years of industry experience we have become one of the UK’s leading property investment companies.
Why not check our latest investment opportunities such as our luxury city-living apartments in The Prestige – or our Central Park development which is set to see a boom in tenant demand due to its trendy Baltic Triangle location.
Don’t miss out – contact one of our friendly sales consultants today who will assist you on any stage of your property investment journey.
Jason Smithwick
Jason is a property writer at RWinvest, reporting on the latest news from the UK buy to let market. Jason writes informative blog posts to help investors stay up to date on everything UK property.
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