Q2 2011 Rental Market Review: Tenant demand increases by 15%

Residential Lettings

Wednesday, August 3, 2011

The number of new tenants looking for rental accommodation has grown by 15% in Q2 2011 compared to the same period last year, according to Countrywide, the UK's largest lettings and property services Group.

The Group's quarterly research into the private rental sector found that despite marginal increases in new rental properties coming to the market, demand continues to outstrip supply with an average of five tenants competing for each available rental property.

In fact, this high demand has fuelled tenants to snap up properties in record average of 13.3 days - half a day quicker than in Q2 2011, even though the number of rental properties available has increased since Q1 2011.

Countrywide, which operates over 1,300 estate agency and lettings offices across the UK, has also uncovered some significant changes the types of properties available to rent, measuring an influx in the availability of larger family homes across the UK. Nationally, 3+ bedroom properties now account for 41% of all rental properties, compared to less than a third of properties in Q2 last year (32%), suggesting the return of buy-to-let investors and sellers looking to let out their unsold family homes.

Regionally, the areas that have seen the biggest leap in the proportion of 3+ bedroom properties available to rent are the North Westand West Midlands. 3+ bedroom properties now account for half of all rental properties in the North West, compared to a mere 28% in Q2 2010. These larger properties also make up 45% of all rental stock in the West Midlands, compared to 21% last year. In comparison, the type of rental properties available in Londonhas barely changed over the twelve months, with around a third of properties falling into the 3+ bedroom category.

John Hards, co-managing director of Countrywide Residential Lettings comments:

"The latest findings provide an interesting insight into the recent changes across the lettings landscape; where both demand and supply has been affected by a subdued sales market. However, positively, we've seen the percentage of reluctant landlords continued downwards, with a 5% fall in the number of landlords renting out their properties to cover their mortgage since Q4 2010.

"Feedback from our branches shows that lots of unsuccessful sellers have chosen to 'let-to-move', tempted by the prospect of a quicker return on investment by letting out their property. Interestingly, some sellers may also be looking to 'rent-to-move' whilst they wait for both a realistic offer on their unsuitable property and their ideal home to come along at the right price.

"Whilst future house price movements remain uncertain and as the mismatch of buyer & seller expectation continues, we are seeing landlord void periods fall and expect this high level of demand to continue.  Viewings are at record highs and there is still an average of five tenants competing for each available rental property, so although the location, price and condition of the property remain important, property undoubtedly remains a sound investment for those hoping to take advantage of high tenant demand."

 

Regional highlights:

- South West:Properties in this region were let within an average of 12.8 days in Q2 2011, with 6.6 tenants vying for each available rental property in the area.

- South East:There were 5.5 tenants to each available home in the quarter this region, compared to 5.3 in the last quarter. The average time to let in Q2 2011 was 12.9 days, one day quicker than in the same period last year.

- North West:In this region, there is an average of 3.9 applicants vying for each available property, unchanged from Q1 2011. In Q2, 31.3% of all properties let were three bedroom homes.

- North:There are 2.6 tenants competing for each available property in this region. Of all properties rented out in Q2 2011, 12% were four bedroom properties.

- East Midlands:Over half (53%) of all rental properties in this area are one and two bedroom homes, with the average property let within 15 days, compared to 14.6 days in Q2 2010.

- West Midlands:In this area, there were 7.2 tenants for each available property in Q2 2011, up from 6 in Q1 2011. Properties were snapped up in an average of 11.7 days, down from 12.1 in the first quarter of the year.

- London:40% of all rental properties available in the capital are two bedroom homes. In this region, properties are being let within 12 days of going onto the market - 4 days quicker that in the same period last year.

- Scotland:75% of all properties available for rent in this area are one and two bedroom properties, whilst in Q2 2011, 52.4% of properties that were successfully rented out were two bedroom flats.

- Wales:56% of all available rental properties are 2 bedroom properties in this region, with only 8% of landlords being reluctant landlords, the lowest percentage across all regions.

 

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