Rents are rising across the UK, but the demand from prospective tenants remains unwavering. Recent data findings suggest that we’re continuing to see competition and demand, even as average rent prices reach an all-time high.
Propertymark released its latest private rented sector report and found that nine properties on average per member branch were freely available and ready to rent in April - A higher figure compared to February’s low average of five, but only slightly below the pre-pandemic estimate of ten. Demand for rental properties remains unwavering as of 2020. A large pool of young people will be looking for a getaway after spending lockdown at home with family but aren’t quite ready to buy yet due to the cost-of-living crisis and getting back on their feet after unemployment rates saw record highs during the lockdown.
Landlords are also under pressure due to the upcoming EPC regulation changes which will be fully phased in by 2025. The new required minimum rating of ‘C’ will mean that many landlords are going to spend thousands on amendments to their properties. Higher EPC ratings already increase the property’s value, but landlords will also have to charge more in rent to keep up with the costs of energy-efficient measures. It’s likely that tenants will remain undeterred by higher rent prices as many seek to reduce their carbon footprint and contribute to a society of more sustainable living. Higher EPC ratings are attractive to renters as they’ll want to spend less on their energy bills.
So far in 2022, Interest in property remains steadfast, with an average of 95 new applicants reported to have registered per member branch in April - an increase compared to 78 per branch recorded in February.
In addition, terminated lease lengths extended to 24 months on average across the UK in April, up from the long-term average of 19 months. Due to high competition and demand, rent continues to rise as a response to current market activity. 75% of member agents reported month-on-month rent prices increasing in April compared to the pre-pandemic figure of just 31% on average.
Propertymark’s Nathan Emerson comments: “The private rented sector desperately needs more properties to meet the overwhelming demand from tenants. The market is starved and as such is becoming very competitive for tenants trying to secure a home.
He continues: “Letting agents reported tenants feeling so desperate they are even creating CVs for their children and pets as well as offering over the asking price if it means they can secure a property.”
Property prices remain dependent on supply and demand, and in densely populated areas with high employment activity such as London, rising demand whittles away at supply while also ramping up the rental prices. Even so, renting remains a more affordable and ready-available option for those looking for their first home or their next. With house prices on the rise, rental properties will need to follow suit to keep pace with large quantities of home hunters opting for tenancies.