Huge surge in demand for rental property as supply flatlines
Research from leading industry data firm reveals extent of looming problems for tenants and agents within PRS.
Demand for rental property continues to soar but estate agents say that while the number of tenants house hunting keeps climbing, the number of available properties to rent has flatlined.
Data from TwentyEA shows that Lets Agreed and New Instructions are down by 19% and 25%, respectively in Q3 compared with the same period in 2019.
With data from Propertymark showing an average of 13 prospective tenants lining up for every rental property letting agents are stuck between a rock and a hard place.
DOWNBEAT
The downbeat performance of the sector is highlighted starkly in TwentyEA’s Regional and Major City tables (below).
Edinburgh is an outlier at +37.8% compared to Q3 2019, albeit from a low volume of transactions, whilst all other locations have seen double-digit declines. The largest decline can be seen Plymouth (-37.4%) followed by Glasgow (-31.0%), Newcastle Upon Tyne (-29.8%) and Cardiff (-25.2%).
As of September 2022, all regions have settled at around 1.5 months of available stock from two months in September 2021. Lack of rental stock and continued demand are the drivers of higher rental prices. The average asking price across the UK was sitting at £1,605 per month in Q3 2022, 19% higher than in Q3 2019.
Landlords could be paying significantly higher interest rates.”
Philip Farrell, Chief Commercial Officer and Co-Founder of Offr, says: “Many landlords have sold up in recent years due to the Government’s relentless taxation measures and rising living and mortgage costs.
EXPIRE
“Nearly two-thirds of all fixed-rate buy-to-let mortgages will expire by the end of 2024, according to the credit rating agency Moody’s, so landlords could be paying significantly higher interest rates.
“Invariably these costs will be passed onto tenants who are facing rising rental prices and a shortage of housing stock, making hunting for a rental property increasingly competitive. This is pushing up the workload of agents and landlords who are having to deal with screening rising numbers of tenants for each property.”
Rental Lets Agreed by Regions & Major Cities Q3 2019 compared to Q3 2022
| Major Cities | Change | UK Region | Change |
| Edinburgh | 37.8% | East Midlands | -12.3% |
| Nottingham | -12.7% | East if England | -14.0% |
| Birmingham | -14.7% | Outer London | -14.2% |
| Leeds | -14.8% | West Midlands | -16.3% |
| Southampton | -17.3% | South East | -16.7% |
| Peterborough | -19.3% | Yorkshire and The Humber | -18.8% |
| Manchester | -19.5% | Inner London | -20.0% |
| Inner London | -20.0% | North West | -20.3% |
| Sheffield | -20.1% | Scotland | -20.7% |
| Bristol | -21.0% | North East | -23.0% |
| Norwich | -22.9% | South West | -28.5% |
| Cardiff | -25.2% | Northern Ireland | -29.9% |
| Newcastle Upon Tyne | -29.8% | Wales | -31.8% |
| Glasgow | -31.0% | ||
| Plymouth | -37.4% |
Source: TwentyEA Data, November 2022
