NUMBER OF PEOPLE LOOKING FOR RENTAL HOMES SOAR BY 88%
Thursday October 20, 2022
Landlords have been overwhelmed by demand with 13 prospective tenants lining up for every rental property.
Would-be tenants face huge competition as the average number of people registering on letting agents’ books has increased by 88% from 78 to a record high of 147 between February and September, according to the trade body Propertymark.
Estate agents said while the number of tenants house hunting keeps climbing, the number of available properties to rent has flatlined. On average, each branch has reported having just 11 properties available since June this year.
However, Nathan Emerson, of Propertymark, said price rises had been tempered by rising costs elsewhere.
“The number of our agents reporting rent increases is down,” he said. “But the UK-wide reform of this part of the market is continuing to affect the sentiment of landlords.”
Around three-quarters of estate agents reported month-on-month rent prices increases in September, down from the high of 82% in July, as tenant affordability is squeezed by record energy bills and a severe drop in real earnings.
Many landlords have sold up in recent years due to unfavourable tax changes and increasing costs.
Buy-to-let investors must also cope with rising mortgage rates, which have risen at pace this year. Nearly two-thirds of all fixed-rate buy-to-let mortgages will expire by the end of 2024, according to the credit rating agency Moody’s, and could face paying rates four percentage points higher than current levels.
While demand has outstripped supply in the rental market, there was evidence that the market for home sales was starting to rebalance, Propertymark found. In September, 52% of estate agents said the majority of sales completed below the asking price. This compares to a low of just 15% in March.
Mr Emerson said: “Sellers will need to be more realistic about the price their home will achieve as the uncertainty of the wider economic landscape begins to cool the previously very hot market.”
Market pundits expect house prices will fall between 8% and 10% over the next year as rising interest rates hit affordability for prospective buyers. The average rate for a two-year mortgage soared past 6% for the first time since 2008 this month.