Renters are ‘sitting tight’ in economically uncertain times, it is claimed, as new figures reveal a drop in demand for rental properties.
Some 35.6% of England’s rental stock has been snapped up in the second quarter of this year – a 0.2% drop on Q1 ’23 and a 3.5% annual fall.
The Rental Demand Index from Barrows and Forrester shows the market remains in ‘good stead’, said managing director James Forrester. But he warned the incoming rent reform bill, which will abolish no fault evictions, could have an impact on rental stock and demand in the future.
The Index also revealed that while national demand dipped slightly, fortunes varied for landlords in different parts of the country.
The Midlands bucked the national trend, experiencing a rise in demand. Herefordshire saw the biggest quarterly increase in rental demand at 7.8%, followed by the West Midlands (6.6%) and Tyne and Wear (6.3%).
However, Cornwall- which saw the highest rental demand in quarter one of this year-, has seen a 14.4% decrease in demand for quarter two. Demand also fell in Shropshire and Essex.
Dorset is the country’s current rental hotspot, with demand sitting at 59.3%, followed by West Sussex and Rutland. Demand was lowest in Leicestershire, Merseyside and Nottinghamshire during quarter two.
Forrester today said the rental market could often be in a state of limbo during quarter two.
“Topline demand for rental homes has remained largely static during the second quarter of this year and this suggests that many tenants are sitting tight during times of economic uncertainty,” he said.
“That said, the market is generally in a state of limbo during this time of year as many tenants have already made their move whether it be for education or work purposes.”
Forrester added the strong level of demand in many areas was ‘encouraging news for the nation’s landlords’.
“While the success of a buy-to-let investment may be primarily focussed on the yield available, it’s also about finding consistency with tenants and avoiding void periods,” he said.
“It will be interesting to see what impact the incoming rent reform bill will have on rental stock and, therefore, demand when it becomes more difficult to execute no-fault evictions, however, the market remains in good stead despite a difficult few years for landlords.”
Data also reveals the biggest rental market growth annually was seen in Rutland, where demand was up 7.8% on last year. Staffordshire also saw an annual rise, as did Herefordshire.
Annual drops in demand were felt in Bristol, Warwickshire and Nottinghamshire.
The Rental Demand Index gauges rental demand in each county based on the level of rental stock already marked as let agreed.
