New research from TwentyEA shows that the lack of rental stock has translated into higher prices, which on average were at £1,652 per calendar month (pcm) at the end of 2022, an increase of £200 since 2021 and almost £300 since 2019.
New Instructions were down by 7.8% compared to 2021, and by over 25% since 2019. This is being mainly driven by landlords withdrawing from the market as tax, regulatory and cost environments have become less favourable. Lack of supply has also compounded on the demand side, as tenants are undoubtedly deferring decisions to buy, as a result of higher house prices, inflation and interest rates.
The pressure on London, Manchester and Edinburgh in terms of supply is abundantly clear in significantly reduced Lets Agreed in 2022, compared to 2021. Elsewhere numbers were generally flat, with Peterborough and the South West being outliers, showing some modest growth.
Stuart Ducker, strategic solutions director of TwentyEA, commented: “This trend is likely to continue as higher interest rates and inflation may be passed on by landlords whilst supply constraints and demand pressures continue to apply.
“Our research shows that the lack of rental properties available in the market in 2022 in comparison with 2021. Aside from Inner London, all regions sit between 1.5 and 3 months stock. The situation has deteriorated considerably in London, Scotland and Northern Ireland.
“Any major improvement in rental stock availability remains in question with interest rates rising, a squeeze on the availability of mortgage particularly buy-to-let and the fiscal and legislative changes from prior to the pandemic that is less enticing for landlords.”
