Shock new figures from Zoopla show that although rental demand has softened over the last year there are still 15 people chasing every home for rent, more than double the pre-pandemic average of six people.
Available supply has grown by almost a fifth over the last year but there are still a third fewer homes for rent than over the pre-pandemic years due to low levels of new investment in rented homes.
Rents have fallen over the last quarter across several regional cities due to localised supply and demand changes and affordability constraints in certain cities.
Average rents have fallen slightly over the previous quarter in Nottingham (-1.4%), Brighton (-1.1%), York (-0.4%) Glasgow (-0.4%), Cambridge (-0.3%) and London (-0.3%). These are modest falls in the context of the rapid growth in rents recently, but it is clear evidence that rental market dynamics are starting to turn in some markets.
In London, there is an inner/outer split. Rental growth has slowed the most in inner areas with rents in Westminster and Tower Hamlets up by less than 2.5% over the last year and posting modest quarter-on-quarter declines.
In contrast, yearly rents are up by over 10% in outer London areas such as Barking & Dagenham, Redbridge and Havering where average rents are 20% below the London average. The average rent in London is now £2,122, still significantly above the UK average of £1,226.
Despite the annual rate of growth in rents and average earnings narrowing overall, there’s a wide variation in how much average earnings are spent on rent.
This ranges from 41% of gross earnings spent on rent in London, to 21% in Scotland. This explains why rents are rising fastest in the North East and Scotland as rental costs account for the lowest proportion of gross earnings. In contrast, in London, the growing unaffordability of renting is starting to act as a drag on rental growth.
This unaffordability is also driven by a lack of supply in the rental market.
The stock of homes in the private rented sector across Britain has remained broadly flat since 2016 at around 5.4m. Although there hasn’t been an exodus of landlords, the levels of net new investment have been low which has stalled any growth in supply to meet higher demand.
This has been compounded by 2016 tax changes and rising interest rates which have impacted the number of buy-to-let landlords. Despite this, Zoopla data shows a continued steady flow of homes for sale on Zoopla that were previously rented. This averages c.31,000 a quarter, a level that has remained broadly constant for the last four years.
Commenting on the latest report, Richard Donnell - executive director at Zoopla - says: “The increase in the cost of renting has slowed to a 30-month low. Rents continue to grow faster than average earnings although the gap is much narrower than a year ago. Rental demand continues to run well ahead of available supply which is keeping the upward pressure on rents but there are some areas where rental growth has stalled.
“The number of private rented homes has been static since 2016 which has compounded the rise in rents over the last 3 years. Growing the supply of rented homes, both private and affordable, should be among the top housing priorities for the next Government. A healthy private rented sector is vital for economic growth and a more balanced housing market. More supply is the fastest route to easing the pressure on renters and improving the overall quality of rented homes”
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What is shocking is that Polly Bleat, Generation Rant, Gormless Gove and the other MPs do not see the link between their landlord bashing, the RRB, abolition of Section 21 etc has all led to landlords selling up.😱 The law of supply and demand is operating in front of their faces and they refuse to see it. 😠
Erm yep! refuse - blind - thick as Pig Shhh. Choose anyone of these.
What utter rubbish
Go on Rightmove, nothing is moving , the market needs an enema
Even if we believe some that landlords are NOT selling, and the numbers of rentals has remained the same 🤔🤔 since 2016 our population has exploded, in the last 2 years it has gone up over 1.3 million alone. I am amazed that only 15 people are chasing each property 🏡
No doubt also licensing Schemes reducing occupancy, say 2 individuals 2 household for a 2 bedroom Flat or 4 persons one household for your Terraced house reducing supply .
This is what happens when you let in 15 million people in just 12 years. Mass immigration makes us all poorer. Rents have DOUBLED in my town in the past 7 years. Wages have not. QED. Everyone has less disposable income. It's not rocket science.
It is to politicians 👎🏻
A few morsels here for the politicians to cherry pick - available rental supply grown by a fifth, rents falling, demand softened. - all good signs for renters they will claim. But here in the real world, 14 out of 15 viewers don’t get the property they went for, those that do are paying a larger percentage of their income than ever and even so investors are looking at BTL and saying…nah
Always a lot of dissapointed applicants as we pick over them to select the one that is most likely to pay on time and not course problems
It's a lot more than 15 round here and rents are still going up.
Zoopla data shows a continued steady flow of homes for sale on Zoopla that were previously rented.
The stock of homes in the private rented sector across Britain has remained broadly flat since 2016 at around 5.4m
If there’s a ‘steady flow leaving’ and few if any new entrants, how’s that not a reducing formula?
Perhaps Zoopla doesn’t even want to say it the way it is!
‘Landlords ARE leaving the Market and many more will do so until the nonsense stops!
This is the result of private landlords selling up due to government policies.
With the loss of section 24 and all the new rental legislation it not possible for a private landlord to make a profit.
Hence quality rental properties have gone from the market.
I’ve found that fewer tenants are moving on. If they only have a 1 in 15 chance of finding somewhere, why move?
Well only if they HAVE TO move on and they are likely just the tenants we don't want
A housing shortage turned into a housing crisis with Generation Rent, Shelter and politicians (weaponising the sector for their own benefit) all to blame...
Ideology is not reality.
Unfortunately these activists lack life experience and/or are so eaten up by their own anger that they can't see further than the end of their noses. Either way this on them. The sad thing thing they were warned, and they were warned, and they were warned again.
I don’t know what’s going on the Councils driving up rents as much as possible everything they do pushes up rent, then at the same time complain about high rents they caused, supposed to be landlords fault. Then say people can’t afford to buy they need a reality check.
Some landlords are thick skinned and nerves of steel I have a house licensed and relicensed 4 times in a particular Road on checking the Public Register (yes there is a Public Register) only one other house in the Road has a license, I checked the 3 post codes for the road. There are dozens of houses let in the road other roads also so the Council is not much good at cludo or dummer than dummer and LL’s have nerves of steel, I’am virtually a nervous teck trying to comply. Recent landlord Court case concluded for letting illegally beds in Sheds, in Ealing, has to pay £380’000.00 check it out for yourselves and don’t cross the Council.
Beds in sheds? Sounds like a plan. Add it to the manifesto Angie, but don't own up to not living there yourself.
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