Renter Demand Increases 25% in Five Months
According to Rightmove, the average number of UK tenants requesting property viewings has increased from 20 to 25.
Since 2019, the average queue has risen by 19. The number rose to 20 by Spring 2023 but increased by 25% in just five months.
Read on to see how this will affect buy-to-let investments going forward!
Private Rental Demand Continues to Go Up in the UK
Rental demand figures underpin the chasm between current supply and demand.
Recent stats showed the average price of a single room in London had risen by over £1,000 PCM.
In addition, the average rent outside of London had hit a new record of £1,278 PCM. New homes in Liverpool, for example, can see an average of around £1,150 PCM.
Per Rightmove data, rental prices had risen by 10% between July and September, compared to Q3 2022.
Regarding investment properties in London, rents had risen to £2,627 PCM – 12.1% higher than the previous year.
Ria Laitmer of Clarkes letting agents in Dorset said:
“The gap between high demand and a severe shortage of rental stock at the moment is just crazy.
“We’re receiving mounting enquiries for each property to rent from would-be tenants, with queues of tenants arriving to open-house viewings and the majority being left disappointed as there is just not enough properties on the market to meet the demand.”
Why Has Rental Demand Risen in the UK?
UK rental demand has soared for numerous reasons.
Chiefly, soaring prices led to high inflation, reducing people’s spending power. As more people could no longer afford a home, they were forced into the rental market.
In addition, students returning from the remote learning days of COVID have also led to increased pressure on the rental mortgage.
For a more detailed breakdown, take a look at our student accommodation investment guide.
Luckily, Rightmove and other experts suggest the supply issue will start to pick up in the future. However, it would take a while for the imbalance to correct itself. The next few years could be very lucrative for buy-to-let investors.
Knight Frank recently published their rental growth predictions for the next five years.
The forecast is as follows:
|Rental Growth (%)||6.50%||5%||3.50%||3%||2.50%|
At the moment, 2023 may set a new annual rental growth record. This indicates that rental demand will not slow any time soon.
However, growth and demand should become more manageable once inflation falls under control.
Until then, for the foreseeable future, property investors can likely expect renter queues for listings to remain high.