Rental market under strain as demand outpaces supply

Rental market under strain as demand outpaces supply

0:01 AM, 5th April 2024, About 2 months ago 5

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A new report reveals demand consistently outstripping supply in the rental market, leading many landlords to sell as their mortgage deals end.

According to the latest figures from Propertymark’s Housing Insight Report, February saw a significant 26% decrease in the number of available rental properties.

Rents also continue to fluctuate with member agents reporting rent rises.

Landlords deciding to sell up

The figures show a 16% drop in the number of new tenancies signed, while rent prices continue to fluctuate, with 38% of member agents reporting a rise in rents.

One member agent stated that with fixed-rate mortgage deals coming to an end, many landlords are deciding now is the time to sell up.

Robert Ulph, ARLA Propertymark advisory panel member and managing director, Pennington (East Suffolk) said: “February has seen more activity in the Eastern counties with landlords deciding to sell up mainly due to the end of good, fixed-rate mortgage deals and the extra taxation from Section 24 beginning to bite.

“I have been hearing landlords just are not able to make any money anymore and if landlords don’t make any money on their investments, they begin to look at other investments and therefore dispose of their rental stock.

“This has been very bad news for lettings stock whereby I have also seen a 50% drop in new letting stock coming onto the market in recent months leading to a continuation of higher rents to the ever-depleting rental stock coming to the market.”

Demand continues to outpace supply

Nathan Emerson, chief executive officer, of Propertymark, says demand continues to outpace supply.

He said: “In the residential lettings sector, tenant demand has marginally decreased. However, stock levels have also decreased and overall, demand continues to outpace supply, in fact, there were around 10 new applicants registered in February for each available property.

“Rents continue to fluctuate by location and property type, although there are some signs of stabilisation.”

Light at the end of tunnel

In the residential sales sector, despite interest rates remaining high supply levels are increasing.

The latest figures reveal an 18% increase in new properties coming onto the market, with around 10 homes placed for sale per member branch in February.

However, the number of people in mortgage arrears has continued to increase.

Mr Emerson said: “Interest rates remain challenging, GDP has stagnated and broader economic indicators, such as mortgage arrears are trending upwards.

“However, there is light at the end of the tunnel, with inflation continuing to fall. In the residential sales sector, demand has temporarily slowed following the January post-Christmas bounce.

“On the supply side, our members are busy with new instructions, which is increasing stock levels. This imbalance may lead to further price corrections but only in the short-term.”


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Comments

Cider Drinker

8:55 AM, 5th April 2024, About 2 months ago

Hundreds of thousands of potential new renters cross the Channel every year.

Meanwhile, government incompetence and landlord-hating, so-called charities continue to demonise and bully landlords. This encourages landlords to quit the sector making the supply of rental properties dry up.

I’m no ‘think tank’ but I think it will get much worse every year until we get a competent government. It’s sad that there is not a single MP on either side of the House that I would vote for. Not one.

Stella

11:50 AM, 5th April 2024, About 2 months ago

A 50% drop in letting stock and an increased number of tenants plus a shrinking social housing sector and all this before the RRB
When the tsunami comes polly pleat will no doubt have the answer.

Reluctant Landlord

12:25 PM, 5th April 2024, About 2 months ago

Reply to the comment left by Cider Drinker at 05/04/2024 - 08:55
Hundreds of thousands of potential new renters cross the Channel every year.

Not quire correct.

The PRS ONLY provides accommodation IF you pass affordability, legal right to rent check, credit and financial referencing....

If you came on a rubber dinghy then the government and Councils shall provide!

Roogy

7:39 AM, 6th April 2024, About 2 months ago

Reply to the comment left by Reluctant Landlord at 05/04/2024 - 12:25
Not quite right - Serco are recruiting pre landlords to house asylum seekers to help lower the amount of hotels being used by government.

Cider Drinker

20:05 PM, 7th April 2024, About 2 months ago

Reply to the comment left by Reluctant Landlord at 05/04/2024 - 12:25
Some are awarded asylum status legitimately. Some less so (careful coaching by the move masters). Some gain employment and pass affordability. Others are housed in social housing thereby denying other U.K. Nationals of the option of that very same social housing.

Whichever way you look at it, hundreds of thousands of new tenants are produced each year due to the governments failed migration policy.

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