Tenant numbers are declining, forcing more landlords to freeze rents
The number of tenants looking for a new home has fallen for the second month in a row and rent increases are also slowing down.
According to industry association Propertymark, the number of aspiring tenants in the average real estate industry in October fell from 83 in September to 71 in October.
This is the second consecutive month that the number of new prospective tenants per location has fallen, after landlords reported sharply increasing demand during the summer months.
On the decline: the average number of new prospective tenants registered per rental office between September and October according to Propertymark
The National Landlords’ Association previously reported that 57 percent of landlords saw demand for their rental properties rise between July and September.
Now, however, the demand for rental housing appears to be declining slightly, making landlords more reluctant to raise their rents.
According to Propertymark, the number of tenants with rent increases fell in October. 69 percent of rental agents saw landlords raise rents, compared to 75 percent in September.
This was the lowest rate of rent increases since June, when rent increases hit 60 percent.
But despite falling demand and a reduction in rent increases, finding housing for renters can still be tricky. This is because the supply of rental housing continues to shrink.
The number of rental properties listed with the average broker has fallen from 213 to 196 in the past year.
Richard Davies, Head of Rentals at Chestertons, said: ‘Lease applications remain very high compared to previous years and we are receiving multiple offers on properties while few homes are available for rent.
“Normally we witness a seasonal slowdown as we approach the end of the year.
“Yet 2021 has been an exceptionally busy year, driven by tenants who have halted their search for a home during the height of the pandemic and are now eager to move.”
Northwest is the most popular rental market
The Northwest had the highest number of new tenants registered per real estate agency in October with 163, according to Propertymark.
However, demand was lowest in Yorkshire and Humberside, Wales and Northern Ireland, where on average only 26 new potential tenants were registered per site.
Renters in the Northeast may find it easier to rent a home as realtors have many homes on the market, but those in the Northwest face stiff competition from other renters
Renters in the Northeast may find it easier to buy a home since the realtors had the highest number of homes on their books at 350.
The rental stock was the lowest in London with an average of only 69 properties under management per site.
Nathan Emerson, CEO of Propertymark: ‘The private rental sector remains under pressure. However, demand has fallen for the second month in a row and the number of tenants with rent increases has fallen.
“There are obvious problems with housing availability, and in some areas, particularly London, there is a very limited supply of rental properties.”
Tenants are returning to city centers
While landlords are generally less likely to raise rents, separate research from Rightmove suggests they are still rising in city centers.
This follows a fall in rents during the initial pandemic exodus, when many tenants fled urban areas in search of space and a better price.
However, according to Rightmove, tenants are now growing again, resulting in rent increases in some of the UK’s largest city centres.
According to Rightmove, Bristol, Nottingham, Glasgow and Birmingham have all seen rents rise by 10 to 12 percent between the start of the pandemic and now.
In the cities of York, Leeds and Manchester, rents in the city center have also seen a recovery to prices that are now higher than in February 2020.
Prices have risen again in a number of city centers, while tenants have taken off
London has also recovered somewhat, with inner-city rents rising 5.6 percent between July and September this year, but still around 6 percent in February 2020, according to Rightmove figures.
Davies said: ‘All London landlords who let properties from March 2020 to June 2021 have taken a major blow to their rental income.
“We saw an influx of rental properties from the spring of 2020, leading many landlords to cut their rents – some by as much as 30 percent
“But we are now dealing with the reverse scenario. In London, demand is significantly outpacing supply and as a result, landlords have been able to increase their rents accordingly, with some rents exceeding 2019 levels.”
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