Tenant to property ratio is easing – but demand will remain high

The gap between the number of tenants and available rental properties is set to narrow by 2030 – but there will still be more than two tenants chasing every property, research reveals.

Tenancy deposit alternative Zero Deposit says that tenant demand underscores the ongoing challenges faced by renters wanting accommodation.

The firm analysed England’s private rented sector (PRS), comparing the number of tenants to available homes and forecasting trends to 2030.

Ratio of tenants per property

In 2023, the ratio stood at 2.19 tenants per property, a drop from 2.22 in 2022.

While this represents improvement from the pre-pandemic figure of 2.28 and the peak of 2.56 in 1991, the market remains highly competitive.

The research predicts a further decline in the tenant-to-property ratio by 2030, with the number of rental homes increasing by 9.5% to nearly 5.408 million.

The number of private renters is forecast to rise by 3.1% to 11.146 million, resulting in a ratio of 2.06 tenants per property.

‘Imbalance between demand and supply’

Zero Deposit’s chief executive, Sam Reynolds, said: “Despite the ratio of tenants to available properties easing last year, the rental sector remains a fiercely competitive place and the imbalance between demand and supply is the driving factor that has caused rental values to spiral in recent years.

“PRS stock levels are expected to continue increasing over the coming years which should see the tenant to property ratio ease further and this could be boosted by Labour’s pledge to deliver 1.5m new homes.”

‘New stock that Labour plans to deliver’

He adds: “However, the intended new stock that Labour plans to deliver is largely targeted at addressing the wider housing crisis and increasing supply for homeowners.

“Whilst some of these homes may inevitably be purchased by landlords this increase is unlikely to address the sector’s supply demand imbalance in a meaningful way and we estimated that there will still be more than two tenants for every PRS home despite the predicted increase in stock levels.

“It’s never been more important to landlords and letting agents to offer tenants choice, particularly to ensure that landlords have access to the largest possible pool of tenants.”

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