Q3 Rental Market Review: Demand soars with rental properties snapped up within a record low of 12.7 days
By Bridging Loan Directory -
The demand for rental property remains at a record high across the UK, as the latest figures from Countrywide, the UK’s largest lettings and property services Group, show that tenant demand for each property increased by 10.8% compared to Q3 last year, a significant rise of 11.9% from Q2 2011.
The Group’s quarterly research into the private rental sector also found that the volume of viewings increased by 17.8% compared to the previous quarter, an annual increase of 8.2%. Tenants are not hanging around either – properties were let on average half a day quicker than the previous quarter, snapped up within a record speed of 12.7 days. In the same period last year, average properties were let within 13.5 days of being launched to market.
In line with figures from the last quarter, Countrywide, which operates 1,300 lettings and estate agency offices across the UK, recorded an average of five tenants competing for each available rental property, despite a marginal increase in the number of properties available.
Demand from investors is also strong, with a substantial rise in the total number of instructions, up 9.2% from the previous quarter. Interestingly, the report has found that the mix of landlords has shifted since the beginning of 2011, with both a larger number and proportion of landlords falling into the first-time investor category. In Q3, 23.5% of all landlords were those investing in property for the first time, compared to 18.7% at the start of the year.
Margaret Longden, Co-managing Director at Countrywide Residential Lettings, comments:
“Since the beginning of the year we have seen a significant increase in tenant demand for private rental property and although there are still some slight fluctuations that can be linked to seasonality, we’ve found that the demand for rental property has remained incredibly high throughout the year.
“We expect this demand to continue over the coming months, not only because many first-time buyers are struggling to save the substantial deposits currently required to purchase property, but also because a lot of people now see renting as a realistic alternative to home ownership, whether it be because they are awaiting further house price falls or because they are attracted to the flexibility that renting can offer.”
John Hards, Co-managing Director at Countrywide Residential Lettings, also points to the increased availability of buy-to-let mortgage deals as a factor affecting investor demand, adding:
“Whilst a range of economic factors continue to affect the appeal of investment in other areas, the availability of competitively priced buy-to-let mortgage deals has helped to make property investment an increasingly attractive option. The reports of fall in house prices and the increasingly high levels of tenant demand have only helped to highlight this further, and as the gap widens between supply and demand levels, there are some great opportunities for those looking to build their property portfolios or invest in the market.
“Tenants now understand that properties aren’t staying on the market for long, and many are setting up email alerts and SMS alerts with our branches to know instantly when a suitable property becomes available so they can arrange viewings. Our findings show that couples under 35 years old remain the largest proportion of tenants, so the demand for one and two bedroom properties remains very high, with most available properties snapped up extremely quickly. However, local demand and supply levels do differ, so for those looking to invest, it’s important to speak to your local letting agent about the tenant demand in your area.”
- London: Over a third (35.8%) of landlords in this region were small-scale landlords, with a portfolio of 1-3 properties, whilst an additional 12.3% were first-time landlords. In London, properties are being let within 11.2 days of going onto the market, compared to 12.8 days in the same period last year.
- South East: There were 5.4 tenants to each available home in this area, whilst the average time to let in Q3 2011 was 12.1 days, down from 12.9 days in Q2 2011.
- South West: Properties in this region were let within an average of 13 days, down from 14.1 days in Q3 2010. 5.3 tenants were vying for each available rental property in the area.
- North West: In this region, there was an average of 4.8 applicants vying for each available property, nearly one extra person per property compared to the average of 3.9 tenants per property in the previous quarter.
- North: There were 3.6 tenants competing for each available property in this area, compared to 2.6 tenants in the Q2 2011. In this region, the majority (30.4%) of landlords own a small portfolio of 1 – 3 properties.
- East Midlands: On average, properties in this region only remained on the market for 13.8 days before tenants snap them up, a full day quicker than in the same period last year and 1.2 days quicker than in Q2 2011.
- West Midlands: In this region, there were 7.3 tenants for each available property in Q2 2011, a slight rise from an average of 7.2 tenants vying for each property in the previous quarter.
- Scotland: In Q3 2011, the average rental property was snapped up within 16.7 days, significantly quicker than the average of 18.9 days seen in the previous quarter.
- Wales: In this area, there are 6.6 tenants vying for each available property, compared to 4.3 in Q2 2011.