Tenant demand increase, as supply of rented homes falls
The most recent data released this month shows that rents across the UK have risen by 2.3% versus the same time last year; this is up from 1.8% in June.
Meanwhile, our own data from June revealed that there has been a staggering 23% surge in the number of tenants looking to rent compared to the same time last year, however this is not being matched by supply - which is down 19% in the same period.
Our Chief Executive, Paul Smith makes this request to the new Prime Minister:
“The rental market is hitting boiling point, as landlords continue to stray away from the buy to let market and the number of tenants registering to rent continues to rise. Nationally, there are more tenants looking to rent properties, but rental supply is down. We are now at risk of pricing young Londoners out of the capital. I urge Boris Johnson to relax taxation against landlords to encourage investment in housing stock again.”
The Royal Institute of Chartered Surveyors (RICS) agrees, stating:
“In the lettings market, the headline tenant demand indicator (quarterly seasonally adjusted data) picked-up to post the strongest reading since the closing stages of 2016. At the same time, landlord instructions fell once again, extending a run of continuous decline stretching back over the past thirteen quarters. Given the current imbalance between supply and demand, near term rental growth expectations were driven higher, with the headline net balance of +25% in July representing the most elevated reading in twelve quarters.”
Many in the private rented sector warned that any increased cost burden onto landlords, together with a reduction in supply caused by ineffective and arbitrary policies, could lead to rising rents – and one month after the tenant fee ban, this already appears to be having an impact. Meanwhile demand for rental homes continues to increase which appears to be exacerbating the situation for tenants.
What about house prices
Meanwhile, the picture from the sales market is a little more mixed; The Office of National Statistics have reported sales growth was unchanged in June at 0.9% compared to the previous month, with the average price of a home in the UK valued at £230,000. Transactions are down 16.5% compared to the prior year.
Rightmove have reported that the housing market fundamentals remain sound. However, the property portal does point out that “confidence has been impaired, causing some potential buyers and sellers to hesitate”.
Whilst Nationwide have commented that their data shows annual house rice growth has remained below 1% for the eighth consecutive month, standing at 0.3% in July.