The Midlands shines as a rental hotspot amid dip in renter interest

The Midlands shines as a rental hotspot amid dip in renter interest

0:05 AM, 29th June 2023, About 11 months ago

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Despite a slight nationwide drop in rental interest, the Midlands is emerging as an exception to the trend, a rental demand index reveals.

The latest findings from Barrows and Forrester highlight that Dorset is the current epicentre of the rental market, with Herefordshire showing the highest growth rate over the last quarter.

The index from the lettings agents looks at tenant demand for rental properties in every county in England based on the proportion of available rental properties that tenants have committed to rent.

The firm says that 35.6% of the rental properties have been secured by tenants – which is a slight reduction in demand compared to the previous quarter (-0.2%).

But it is a significant decrease year-on-year of -3.5%, though the Midlands contradicts the overall trend.

‘Demand for rental homes has remained largely static’

James Forrester, the managing director of Barrows and Forrester, said: “Topline demand for rental homes has remained largely static during the second quarter of this year and this suggests that many tenants are sitting tight during times of economic uncertainty.

“That said, the market is generally in a state of limbo during this time of year as many tenants have already made their move whether it be for education or work purposes.”

‘Encouraging news for the nation’s landlords’

He added: “There remains, however, a strong level of demand in many areas and this is encouraging news for the nation’s landlords.

“While the success of a buy-to-let investment may be primarily focussed on the yield available, it’s also about finding consistency with tenants and avoiding void periods.

“It will be interesting to see what impact the Renters Reform Bill will have on rental stock and, therefore, demand when it becomes more difficult to execute no-fault evictions, however, the market remains in good stead despite a difficult few years for landlords.”

The most sought-after location in England’s rental market

Dorset has emerged as the most sought-after location in England’s rental market, boasting a tenant demand of 59.3%, with West Sussex trailing close behind with a demand rate of 58.1%.

Other popular rental locations include Rutland (55.8%), Somerset (54.1%) and Wiltshire (53.9%).

On the flip side, Leicestershire, Merseyside and Nottinghamshire are experiencing a chilly season in the rental market, recording low demand rates of 23.7%, 24.7%, and 25% respectively in Q2 2023.

Herefordshire has an impressive quarterly increase of 7.8%, closely followed by the West Midlands (6.6%), Tyne & Wear (6.3%) and Northumberland (6%).

The position of strongest rental demand

However, not all regions have enjoyed success with Cornwall, which held the position of strongest rental demand in Q1, experiencing a significant drop of 14.4% in the quarter.

Shropshire (-7.1%) and Essex (-4.9%) also saw declines.

Year-on-year, Rutland is celebrating the highest growth in rental demand, up 7.8% compared to last year.

Staffordshire follows with an annual rise of 5.6%, and Herefordshire isn’t far behind at 5.3%.

At the other end of the spectrum, the City of Bristol, Warwickshire and Nottinghamshire have seen the largest annual drops in tenant demand, down 13.5%, 12.2% and 10.5% respectively.

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