The latest industry report into the private rented sector (PRS) from Propertymark shows that supply and demand of rental properties continues to be out of balance, with tenants remaining in properties for longer than previously.
Members of Propertymark reported an average of eight properties per branch and while this was an improvement on the previous month’s data of five properties, the number of prospective tenants registering was an average of 93, compared to 78 new applicants per branch the month before.
Tenants may well be staying for longer due to the shortage in supply of suitable property to move on to, which then exacerbates the situation further as the overall churn of properties reduces. This stagnation is also being reflected in rising rents that tenants are prepared to pay.
“Our latest report shows that tenants are staying in properties longer,” said Nathan Emerson,CEO Propertymark. “This is in part due to rock bottom levels of stock meaning tenants have very little choice when looking to move. They will also find fierce competition is pushing up prices of what is available often making it unaffordable to move.”
The latest Deposit Protection Service (DPS) Rent Index shows that rents have increased in the UK by over 6% on average in the last 12 months up to an average of £849, from £800 and have risen by £15 since the end of 2021 alone.
All regions across the UK have seen an increase, with 10 of the 12 regions experiencing increases of more than 4%.
In the East we have seen an increase of 5.7% with the average rent now standing at £894 per month.
A further DPS survey also highlights how around 15% of tenants paid above asking rents to secure their property.
“Consistent quarterly rent rises,” commented Matt Trevett, Managing Director, The Deposit Protection Service, “coupled with survey results that suggest that a proportion of tenants are overpaying to secure a property – underlines the current intense demand for, and tight supply of, rental homes in the UK.”
All property types have seen this increase with demand for detached properties remaining high throughout the last 12 months, with national average monthly rents rising 8.4%, semi-detached properties are up 7.1%, terraced 6.8% and flats the same at 6.8%.
Interestingly for the first time since before the pandemic, flats are the property type with the biggest quarterly rise in rents, rising 1.9% in the past quarter. London flats have had a significant effect on this data as they are recovering well from the time of lockdown when many tenants looked to leave the city for more space. During the last 12 months London flats have seen almost a 9% increase.
As always if you would like any further information on this or are looking to invest and would like advice on where to find the healthiest yields in our local market to secure the best return on your investment, please get in touch as I am happy to help.
