According to a new report by Sequence, demand continues to outstrip supply across the UK’s residential rental sector, with an average 7 tenants chasing each new property on the market.
Analysing data from hundreds of estate agents which include Barnard Marcus and William H Brown, the information has shown a sharp spike in the number of people renting properties over the last 12 months.
Rising cost of renting
The new data shows that the average tenant outside of London paid £697 per month in July, up from £670 recorded in July 2013. Over the same period, renters in London experienced a 6% rise, with the average cost now at £1,515.
There is a strong demand for rental property across the UK, with increase up on an annual basis by 18% in July. Exacerbating the market, there has been an average 19% drop in supply over the same time period.
“The rental market across the UK is increasingly competitive with demand rising at the same rate at which supply is dropping [while] activity in London’s rental market is even more abuzz,” Stephen Nation, Sequence’s head of lettings commented. “This severe shortage of rental properties coming onto the market means that rents in the Capital have increased by 6pc annually to £1,515 per month.”
Sequence expects that the rental shortage will ease over the next few months, partly due to relaxation in pension rules which have enabled some people to invest their money in buy-to-let property. Applications for buy-to-let mortgages have increased by a fifth in the last 12 months and by 3% since June.
Strength of the rental market
The rising strength of the rental market may coincide with tighter restrictions on lending and an imminent rise of interest rates.
Property prices in the UK remain high and buyer demand continues to outstrip supply in many areas. It has been suggested that there is an undersupply in for both renters and would-be homeowners.
New buy-to-let properties
The UK’s residential market continues to go from strength-to-strength, with many areas in need of new build developments.
For investors looking to cash in on the property market, off-plan developments can offer investors a lower entry into the UK’s buy-to-let market.
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