Rental market is ‘still underpinned by high demand’

Rental market is ‘still underpinned by high demand’

8:16 AM, 29th September 2022, About 2 years ago

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Demand from tenants for a home to rent is creating a market that is like a ‘pressure cooker getting hotter’.

That’s the verdict from Nathan Emerson, the chief executive of Propertymark, who says that the number of new tenants being registered per member branch reached a new peak at 141 in August.

But the supply of available homes to rent has not risen in the last three months, the latest Housing Insight Report reveals.

Pressure on rents will rise even further

Propertymark says that with a growing mismatch between supply and demand, pressure on rents will rise even further.

And the supply of available homes remains constant with agents reporting having 10.9 properties on average per branch that were available to rent in August — that’s the same figure as the last two months.

The report highlights that 10.9 properties is 98% above the December figure of 5.5.

Month-on-month there has also seen a slight increase in new prospective tenants registering, suggesting the autumn market may have started a little early.

‘We see a pressure cooker getting hotter’

Mr Emerson said: “In the rental market, we see a pressure cooker getting hotter.

“The government seem to be missing every opportunity to re-evaluate costs for landlords, whilst this isn’t the most sentimentally attractive conversation for politicians, it must be understood that if investment doesn’t work for landlords, ultimately tenants are severely impacted by a lack of choice and high rent prices.”

Propertymark also reveals that the number of available properties for sale per member branch has risen by 47% since the depths of winter last year.

However, demand has risen by 79% over the same period.

The number of agents reporting an average price agreed at or above the asking price has held steady since July when there was a minor fall compared to June.

The winds are still blowing in the seller’s favour

This shows, Propertymark says, that the winds are still blowing in the seller’s favour, if not quite as strongly as before.

The number of new buyers registering per branch in August rose slightly over July, potentially indicating the start of a pickup and there were 86 new prospective homebuyers registering – a 79% increase since December last year.

Mr Emerson said: “The number of people wanting to buy is still good, and the number of properties available to buy is recovering from the mad dash we had before.

“Buyers and sellers alike are aware of cost-of-living increases and interest rate rises, there are those of a generation who will remember much higher rates but there is a new wave of buyers who won’t have seen these levels before that will become more cautious with their budget.”

He added: “What we have today however, is the ability to be flexible on location due to remote working which has a large impact on price.

“This new dynamic will help home movers and is a factor that hasn’t previously existed.”

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