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TODAY'S OTHER NEWS

Tenant demand hits record high as housing supply falls

Rental demand reached a record high of 88 prospective tenants per letting agency branch in January, up 57% from an average of 56 tenants per branch a month earlier, according to ARLA Propertymark.

But while the demand for rental accommodation grows, the supply of rental stock continues to fall, hitting its lowest level in seven months in January. 

The number of properties managed per branch fell from 206 in December to 191 last month. 

Supply has not been this low since July last year when it stood at 184.

The widening supply-demand imbalance in the PRS is placing upward pressure on rental prices, with the number of letting agents witnessing rents increase hitting 42% in January, compared to 32% in December last year.

David Cox, ARLA Propertymark chief executive, commented: “This month’s results are a huge blow for tenants. With demand increasing by more than half, but rental supply falling, rent costs are unsurprisingly being pushed up. 

“Our recent research found that tenants could miss out on nearly half a million properties as more landlords exit the traditional private rented sector and turn towards short-term lets which will only serve to worsen the problem for those seeking longer-term rental accommodation.

“With the Spring Budget around the corner, it’s important that the Government works to make the private rented sector attractive to landlords again, rather than introducing complex legislation which ultimately squeezes the sector and leaves tenants worse off.”

  • Suzy OShea

    Oh Really! well, I have not noticed this rise in East London, where the situation is becoming so desperate that some landlords are offering 90 % off the first weeks rent! So where do you get your information?

    Daniela Provvedi

    I've read that many LL (including some on this forum) have been selling their properties, due to reasons like Sec 21 and Sec 24 to name a couple.
    Many LL's have also started doing short lettings like Airbnb. I'm not surprised rental stock is falling by the month, to be honest.
    I personally noticed in October last year, when one of my apartments became available for rent, I had more people wanting it within the first hour of when the advert went live, than I've ever had in my 20 years of being a LL. I offered no discount and my rent was high.

     
  • Paul Barrett

    It does seem strange that rents are NOT necessarily increasing.
    I have two flats that have been available for months.
    Few takers prepared to take at rent required.
    So much so that I will be selling along with all the other reasons

    These flats aren't viable unless at the rent I need.

    That is only because of Govt imposed bonkers policies.

    I still maintain that even though many rental properties are being withdrawn from AST letting there are still far too many rental properties available such that there are no desperate tenants and no shortage yet of rental properties.
    I wish there were!!

  • icon

    I have never got the rent that I wanted in all the thirty years I have been letting out property.
    As I have pointed out before on this forum, you can't buck the market and where I am, tenants will only pay what they can afford and often that is not that much compared with other areas of the UK.
    I have a four bedroomed maisonette that I used to rent out for £625 per month twenty years ago.
    Now, I am able only to command £599 per month for it.
    I am definitely going to start selling property before the situation gets any worse.
    I am very lucky that I own every property that I have, but the ever changing climate in the PRS is playing on my nerves. I am left wondering what next are we going to be required to do for nothing, to satisfy the powers that be?

    Paul Barrett

    Times are going to be very difficult for the leveraged LL.
    They have costs to meet and margins have been considerably reduced by recent bonkers anti-LL regulations.

    To the point where viability is questionable.
    If there is no real headroom to raise rents to cover these additional costs let alone an annual RTI then what is the point in remaining a LL?
    Significant CG is a very distant dream.
    Best to get rid of all leverage to be resilient to even more bonkers regulations.
    Real net income will reduce for deleveraged LL but at least that is survivable.
    Not so for the leveraged LL sole or corporate trader.
    Though of course corporates have it a bit easier as no S24.
    But difficult to extract monthly income cost effectively from a corporate entity.
    LL want jam today not in 30 years time!
    The days of the leveraged LL are coming to an end.
    Very worrying for tenants as 50% of the PRS comprises leveraged LL.
    If they go who gonna house all the tenants etc?

    What I am hearing anecdotally is that many LL are going to short-term accommodation variants.
    This even though invariably they are breaching all sorts of conditions.
    But to avoid being forced to sell up this is what they are doing.
    Whilst there are risks in short-term letting I've seen the figures whereby even after monthly management costs LL are doubling their monthly rental income by going short term.
    Certainly has me thinking!

     
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