Over the past 3 years, the property market’s supply crisis has underpinned price growth in the rental sector, which climbed by 2.61% year-on-year. This comes as tenant demand is up by around 6%, while the number of rental properties available is around 50% lower than a year ago.
Recent data analysis has revealed that enquiries from tenants looking for properties in the UK’s capital were up 171% during the first six months of 2022, as compared to the pre-covid year of 2019 and 58% more than last year.
London is tackling the supply crisis
London has long been the UK’s hub for landlords and prospective tenants, as shown in the 35% rise in market stock since the start of 2020, a figure which is unparalleled by the rest of the UK.
Across the capital, over 13,000 build-to-rent units have been added to the market over the course of the past two years, whereas pre-covid levels in the same period saw only 9,716.
Prospective tenants flood to London in search of a larger scope of properties available to rent, as supply begins to dwindle elsewhere in the UK.
The UK’s most competitive market
For landlords in London, the ball remains firmly in their court as tenants are having to act quickly to arrange viewings and put in their offers and are willing to pay more for their rent than they were previously to secure a rental home.
As we leave summer and approach the festive holiday season, all numbers point towards a bustling and competitive market remaining steadfast for the foreseeable future. Because of this, rent prices are predicted to creep up slowly as property situated in city locations will only increase in value as demand continues to outweigh supply.
House price growth
While many Brits are grappling with the cost-of-living crisis, rising interest rates and inflation, saving for a hefty deposit is resolvedly taking a backseat and potential homeowners may be choosing to hold off until price growth in the housing market cools down.
The rise in tenant interest could be a result of thousands of Brits seeking a temporary home during times of a challenging economic climate. Additionally, tenants who have already secured their lease are more reluctant to move out with competition for housing rising in the capital, resulting in an increase of long-term tenancies - which provide landlords with a stable flow of income.
There are now 24% more tenants choosing to extend their lease than in 2019, and the number is 13% up from last year alone.
The most attractive rental properties
While London’s residents have long recognised the glitz and glam of living in the nation’s capital, home hunters driven by the return to normal life after the pandemic have a new and increased appetite for high quality, secure and well-managed rental accommodation. London is known for its modern and refined buildings, and the attraction for securing a home in a stunning city location which has close access to transport links remains a long-term option for many remote workers and daily commuters.
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