Five tenants chase every property

Ryan Fowler

September 17, 2014

Countrywide’s research found that demand for rental accommodation across Britain has grown over the past 12 months on the back of a housing market which is beginning to show signs of cooling.

This increased demand is being reflected in rental values with 15% of properties let for more than advertised in August.

That figure rises to 19% in London amid greater tenant competition, the highest level for 13 months.

Despite the increase in demand over the past three months the figures remain well below 2012 levels.

The average rent in the UK passed the £900pcm barrier for the first time in August 2014, up £13pcm from July.

Over the past 12 months average rents have increased 5.1%, rising twice as quickly as the same time last year.

As has been the case throughout 2014, it has been London and those areas in zones 2-6 in particular, which have led this growth.

While the number of properties coming onto the market has remained broadly stable, in the Capital, rental growth is a product of strong growth in tenant numbers up 12% over the past 12 months.

Outside of London, particularly outside the South East, the level of demand has remained much closer to the number of properties available.

Nick Dunning, group commercial director at Countrywide, said: “The significant level of mobility between the sale and rental markets means changes to the level of demand in the sales market will have a knock on effect in the rental market.

“With over half of those using the Help to Buy scheme coming from the private rented sector, and the large rise in the number of first time buyers over the last year, rental growth has been subdued.

“The gradual cooling of the sales market over the past 1-2 months means we have begun to see upward pressure on rents, driven by a rise in demand from tenants with fewer leaving the sector.

“An increasing number of landlords have been able to re-let their property at a higher rate with tenants willing to meet and in some cases surpass rising asking prices.

“With the number of households in the private rented sector having risen 50% between 2007 and 2013, this structural tenure shift will continue to drive rental growth for the foreseeable future unless a significant number of new homes are delivered.”

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