‘Easiest time to rent in six years’ as housing supply improves
Renters in the UK are enjoying the lowest level of competition for homes in six years, as price growth slows and stock increases.
While 6.5 renters competed for every property last year, the average number of enquiries per home is now 4.8 – the lowest rate since 2020, according to Zoopla’s quarterly rental market report.
Demand for rental homes is falling because improving mortgage conditions mean more Brits are leaving the market and becoming first-time buyers, the report claimed, while falling migration into the UK is also easing demand.
The cost of renting is also falling, with the average rent for a property outside London accounting for 33.5 per cent of a person’s gross income, down from the 20-year high of 35 per cent reached in 2023.
Inflation in rent prices slowed in the four weeks to 1 March, at 1.9 per cent, down from 2.8 per cent in the same period last year.
But prices are set to increase by around two per cent this year because, though 11 per cent more homes are available now than a year ago, supply is still 23 per cent below pre-pandemic levels.
Rents are increasing at the fastest rate in England in the North East, where average prices grew 4.2 per cent year on year, below London’s 1.7 per cent price inflation rate.
The average rent in London is £2,187 per month, having increased by 2.6 per cent in the last three years.
Rental market improving but still strained
Richard Donnell, executive director at Zoopla, said: “The rental market is moving back towards balance as demand cools and more homes become available to rent.
“Renters are facing less competition for homes and slower rent increases than in recent years. Localised changes in demand and supply are resulting in rents falling in some cities but this will be only a short lived trend.”
But some property experts said the market, though the least competitive it has been in six years, is still unaffordable for many.
Nathan Emerson, chief executive of property agent trade body Propertymark, said “demand for properties continues to outstrip available stock”.
“Any reported uplift regarding additional rental properties being available must closely acknowledge the scenario of there still being intense pressure on supply,” he said.
Emerson said more and more of Propertymark’s members are exiting the sector, with nearly seven per cent more having chosen to sell their properties this year than last.
Tom Bill, head of UK residential research at real estate consultancy Knight Frank, said the lack of rental supply is particularly acute in London, where renting is twice as common.
He said: “[In London], there is still a notable lack of supply in many areas that is pushing rents higher.
“Some landlords have already sold due to extra red tape and taxes while others are waiting to see how disruptive the renters rights act is when it comes into force in May.”