Competition for rental homes has fallen to its lowest level in six years as demand from tenants drops and supply improves, latest data from Zoopla reveals.
Zoopla’s latest rental market report shows the average number of enquiries per rental property has declined to 4.8, down from 6.5 a year earlier, as demand from renters falls and more homes come onto the market.
Tenant demand has dropped 14% year-on-year, while the supply of rental homes has risen 11% over the same period. The shift has slowed rental growth, with rents for new lets increasing by 1.9% annually, compared with 2.8% a year ago.
The cooling rental market is partly linked to improving conditions in the mortgage market, which has helped more renters move into homeownership. Falling migration levels have also reduced pressure on rental demand.
Despite the easing in competition, supply remains below pre-pandemic levels and affordability continues to be a challenge in many areas.
“Market conditions for renters are the best they have been for six years.”
Richard Donnell (main picture, inset), executive director at Zoopla, said: “Market conditions for renters are the best they have been for six years.
“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.
“However, supply remains well below pre-pandemic levels, which means increasing the number of rental homes remains key to improving affordability for the UK renters over the long term.”
BIG CHANGES
Nathan Emerson, CEO of Propertymark, added: “The rental market continues to bring challenges that are tightly aligned to both fundamental economic pressures and new influence from updated legislation.
“We are witnessing some of the biggest changes in well over 30 years, with the introduction of additional consumer protections, plus a modified taxation framework for landlords.
“We currently have a rental landscape where 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.
“In addition, when looking at the latest data available, Propertymark members report a near 7% increase in the number of landlords who have chosen to sell their properties year on year.”
