Rents fluctuate amidst supply shortages in PRS

Tenant demand is still continuing to outstrip supply with letting agents seeing a reduction in stock levels.

The latest figures from Propertymark’s Housing Insight report reveal a 16% fall in the number of new tenancies signed in December.

According to the report, rents continue to “ebb and flow” with some agents reporting a rent increase.

Supply and demand imbalance

Letting agents continue to report the consequences of the supply and demand imbalance with stock levels remaining low. Rental arrears during the festive period also increased as many families faced financial pressures in the run-up to Christmas.

Nathan Emerson, chief executive officer, of Propertymark, says the private rental sector continues to see certain trends.

He explains: “The lettings sector is subject to the same seasonal trends resulting in tenant demand and new tenancy completions being lower than the previous month.

“Regardless there remains a supply and demand imbalance with around seven new tenant registrations for each available property.

“While rents continue to ebb and flow with some seeing rises (35%) in December, 49% of agents reported rents staying the same suggesting some restraint.”

Lowest points in the year

The residential sector saw house prices falling from recent highs. However, the downward trend is not seen in all parts of the country.

Specifically, whilst there have been notable falls in England and Wales between November 2022 and November 2023, there has been positive growth in Scotland during the same period.

However, the number of new properties coming into the market reduced by 28% in December.

Mr Emerson said: “In the residential sales sector, we have reached the trough of the seasonal trend that begins in Autumn and runs to Christmas.

“Key supply and demand indicators, such as the number of buyers registered and the number of new sales instructions, are at their lowest points in the year.

“In 2024, we expect to see pressures remain on house prices, with further adjustments required to match valuations to market expectations.”

The full report can be read here