According to the latest data from Sequence's National Rental Report, average monthly rent has risen by 1% to £705 as a result of a 7% increase in demand for rental properties.At the same ...
According to the latest data from Sequence's National Rental Report, average monthly rent has risen by 1% to £705 as a result of a 7% increase in demand for rental properties.
At the same time supply has fallen by 17% over the same time period resulting in over 5 buyers competing for every new rental property to come onto the market, up from 4.8/1 last month and 4.0/1 last year.
As you would expect, the picture in the Capital is even more acute. While applicants are up 34% annually, the number of properties has actually seen a drop of 16% over the same time period. The ratio of applicants to registrations is currently 8.5/1, up from 5.3/1 a year ago. However, the ratio is still below its peak of 10.5/1 in October. This has led to rents rising 1% on the month and 8% annually to an average of £1,507.
Demand for buy-to-let mortgages is continuing to increase with applications up 7% on the month and 2% on the year. It is also up 28% on two years ago. This trend of increasing buy-to-let mortgage applications is set to continue with interest rate rises not expected for the foreseeable future. With changes to pension annuities set to come into force next month, we are anticipating a rise in the number of investors entering the market.
The number of tenant viewings in the UK is up 4% on the month and 3% on the year. Meanwhile there has been a 16% annual rise in the number of new tenancies; however there has been a slight dip of 2% on the month. There are now 6.5 viewings per tenancy agreed, compared with 6.2/1 in January and 7.3/1 twelve months ago. Looking at the annual comparison it is clear to see that the market is much more competitive than it was last year, with tenants viewing properties fewer times before committing to a contract.
Viewings in London have also increased, rising 6% on the month and 5% on the year - marginally higher than the rest of the UK. In terms of new tenancies, there has been an 11% increase on the month and an 18% rise on the year. There are now 11.3 viewings per new tenancy in London, which is a reduction both on the month and on the year, down from 11.9 and 12.7 respectively.
New Agreed Tenancies
While the number of new tenancies has risen significantly in London, up 11% on the month and 18% on the year, the UK lettings market has seen a small drop since last month with the number of new move-ins down 2%. However, annually the number of new tenancies secured nationally is up 16%.
Stephen Nation, Head of Lettings for Barnard Marcus, comments: “UK rents are up 7% on the year and 1% on the month as a result of the rise in demand for rental properties. Tenant applications have risen 7% annually across the UK while available stock is down 17%, which has resulted in almost nine tenants chasing every new rental property coming into the market. As the sale market continues to price out would-be first time buyers and the population continues to expand, the increase in demand is not expected to decrease. Supply is expected to increase as the number of buy-to-let investors grows following the changes to pension annuities, however not at the rate of demand.
The convergence between supply and demand in London is even more dramatic, with demand for rental properties soaring by over a third in the last 12 months. Supply has been unable to keep up and has in fact declined by 16% over the same time period. This level of competition is in turn pushing up rents by 8% on the year and 1% on the month to reach an average of £1,507.”