British landlords reap the rewards of the rental market as demand grows 11 per cent but supply drops 13 per cent in the year to January 2015
The number of people looking for property to rent has risen yet again according to new research from Sequence which also showed that supply is falling.
Stephen Nation, Head of Lettings at Sequence, said the gap between supply and demand was causing the market to become increasingly competitive with nearly five tenants chasing each new available rental property.
“The private rented sector remains very buoyant, especially when compared to this time last year – large cities in particular are seeing a lot of activity as employment increases and house prices growth holds firm,” he said.
Good news for landlords
Sequence said that rents have also increased as a result of the divergence between supply and demand – a statement which reflects findings from the latest Countrywide study into rental costs.
Countrywide’s research showed variations in prices across the UK while Sequence put the national average rental charge at £702 per month for this January but excluded London from its calculation.
London rents stood at £1,494 in January while 2014 saw demand for rental accommodation in the capital increase by 47 per cent.
Despite the higher rents, tenancy agreements grew throughout the country; up 16 per cent overall and up 14 per cent in the capital alone.
London also witnessed some of the highest competition for properties as supply dropped by seven per cent to leave around eight prospective tenants fighting for every available home.
The short supply of housing has meant existing landlords have been able to enjoy greater security from their rental properties but plans to tackle the property shortage could work in their favour too.
The number of new homes being built in the UK has risen by 10 per cent since 2013 and gives buy to let landlords more opportunities to expand their portfolios and satisfy increasing tenant demand.
The National Housing Federation has also stated that there is a backlog of 515,340 un-built homes which were granted development permission in the UK from 2011 – providing further opportunity for landlords and investors to meet high tenant demand in the future.