Rental supply tightens as affordability pressures mount

Demand continues to outstrip supply, with fears the Renters’ Rights Act’s 12-month re-letting ban could further squeeze the rental market.

Propertymark’s Housing Insight report shows an average of nine applicants competing for every property available across member branches.

Affordability pressures are also pushing more tenants into rental arrears.

Decline in supply

According to the data, the proportion of member agents reporting arrears problems increased sharply to 3.4% The average number of properties available for rent at member branches dipped slightly to 10.86.

A Propertymark member agent from the South West warned the decline in supply could worsen.

The agent said: “We are seeing more properties that can’t sell coming back to the rental market.

“However, many potential landlords are being put off by the Renters’ Rights Act rule that, after trying to sell, they are not allowed to rent the property again for 12 months. We feel this will have a massive effect on the availability of properties in the future, causing more problems with a lack of rental stock.”

As previously reported by Property118, Housing Minister Matthew Pennycook admitted the government have not carried out an assessment on the 12-month re-let ban.

Despite a last-minute attempt in the House of Lords to reduce the period from twelve months to six months, the amendment ultimately failed.

Struggling with affordability pressures

Phil Spencer, founder of MoveiQ, warned many renters were struggling with affordability pressures.

He said: “Demand remains dramatically higher than supply, with nine applicants competing for every available rental property.

“Although rents were relatively stable through the month, affordability remains stretched, and the increase in rental arrears is a warning sign that many households have little room for further financial pressure.”

Balance of power remains with buyers

In the residential sales market, conditions remain positive but cautious, with the number of new prospective buyers registered per member branch climbing to an average of 75.

On average, each member branch had around 10.9 homes available for sale, while the average UK house price stood at £272,000.

Nathan Emerson, chief executive of Propertymark, said: “The rise in prospective buyer registrations, alongside a modest increase in sales agreed and new instructions, suggests there is still underlying demand in the sales market.

“However, with stock levels continuing to build and the majority of properties achieving below asking price, the balance of power remains firmly with buyers.

“Agents are also reporting a more cautious approach from consumers, with realistic pricing increasingly critical to securing a sale. The fact that more than half of agents are seeing most sales take 17 weeks or more from acceptance to exchange is particularly concerning. Delays in the conveyancing process continue to create uncertainty and can undermine confidence in an otherwise functioning market.”