A concerning trend is emerging in the rental housing market, with landlords increasingly choosing to leave the sector despite a marked rise in tenant demand, according to Propertymark’s latest Housing Insight Report.
The report reveals that tenant registrations surged from 82 in March to 90 in April 2024. However, this increase in demand is not being matched by a corresponding rise in available rental properties. Currently, there are nine new applicants for every available rental unit, highlighting a significant supply-demand imbalance.
Nathan Emerson, Chief Executive of Propertymark, expressed concern over this trend. “Our members remain worried that landlords are exiting the sector,” Emerson stated. “The reasons for their departure are complex, but ongoing legislative uncertainty is certainly a significant factor.”
Emerson emphasized Propertymark’s ongoing efforts to engage with policymakers across the UK. “We are working to underscore the essential role the private rented sector (PRS) plays in the broader housing system and to advocate for policies that stabilize investment patterns within the sector.”
The report also notes that while stock levels have seen a slight increase, demand continues to outstrip supply. Additionally, in some regions, rental prices have reached a ceiling in terms of affordability, according to Emerson.
Despite these challenges, the report contains some positive economic indicators. The UK’s GDP grew by 0.4% in March, and inflation, measured by the Consumer Price Index (CPI), dropped from 3.2% in March to 2.3% in April, nearing the Bank of England’s target rate. Emerson expressed hope for a forthcoming reduction in the base rate, which could provide much-needed relief.
The residential sales sector also experienced a boost in April, with an uptick in prospective buyer registrations, new sales instructions, and the number of sales agreed. However, the market continues to face challenges. The gap between asking prices and market expectations is narrowing, but sustained efforts are needed to maintain market momentum.
In light of these developments, Propertymark advises homebuyers aiming to move in before Christmas to act swiftly to secure their transactions.