Sequence, one of the UK’s leading letting agencies, has released their latest findings on the current state of the rental market. The group has discovered there are almost 7 prospective tenants to each property that is currently available to let.
The amount of consumers looking to rent had seen an increase of 17% during 2014, up until the end of August. The number of rental homes, however, has dropped significantly by 20% – thus not coming close to meeting current demand.
Regionally, the area most affected by these supply and demand pressures is London. Having seen the greatest increase in house prices, the number of people now seeking rental property in London has increased by 57%, with private rental property available decreasing by 8% – all within the past year.
Sequence deems the surge in demand for rental homes as being due to the rise in house prices, which are now being unaffordable to many, as well as the expanding UK population.
There is now an average of 6.5 tenants looking to rent each property on the market. Whereas at the same time last year, the figure stood at an average of just 4.4.
With the competition between landlords and letting agents hotting up, the pressure is building within the market, causing rental prices to surge more than 4 times faster than the average salary.
In London, the typical monthly rent has risen by 9% since 2013, and is now at an average of £1,597. The rest of the UK however has only seen a 4% increase, with an average monthly rent of £708.
"The new generation of renters are willing and able to pay more for their rental property. Until supply is able to keep up with demand, then I would anticipate rents will continue to rise." says Stephen Nation, Head of Lettings at Sequence.
Excluding London however, the number of new tenancies that have been agreed has actually risen by 7% in August this year and 17% annually, across England and Wales.
Agreed tenancies within London have also seen an increase, of 13% in August alone — up by more than a quarter compared to the same time in 2013.
Does this mean you should be encouraging buy to let sales more frequently, or is this all due to a lack of properties in general? Should consumers be advised in greater depth on property ownership, or should the rental price rises just be capped?
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