11 Tenants Chase Every Buy-to-Let Home

Eleven hopeful house hunters are chasing just every home to rent offered by most letting agents. 

ARLA - the letting agent trade body -  says tenant demand increased in January 2023 following three straight dips after hitting the year’s high in September 2022.

Despite speculation that landlords are fleeing the market and either selling their rental properties or switching them to holiday lets, the number of homes available has remained the same for most of the past year.

Letting agents told ARLA each member’s office registered 108 prospective tenants but averaged only ten available homes to rent in January.

Rental properties are running out

CEO Nathan Emerson said: “The number of applicants looking for rental property rose sharply in January, and although we have seen a slight increase in the number of properties available, it is nowhere near enough to keep in line with high demand.”

Meanwhile, official data shows that renting costs are rising the fastest since records began in January 2016.

Tenants paid an extra 4.4 per cent in the 12 months to the end of January, says the latest rent survey by the Office for National Statistics (ONS).

The most significant rent rise was five per cent in the East Midlands, while the lowest was 3.9 per cent in the neighbouring West Midlands. London rents were up by 4.3 per cent.

"Private rental prices in London increased by 4.3% in the 12 months to January 2023, up from an increase of 4.0% in December 2022. This is the strongest annual percentage change in London since August 2015,” says the report.

However, the Royal Institution of Chartered Surveyors RICS) expects the rental market to cool.

“Tenant demand increased over the month. However, this is the least elevated reading since February 2021 and suggests that the pace of demand growth is softening across the rental market. On the supply side, new landlord instructions remain on a downward trend, so near-term expectations continue to point towards rents being squeezed higher,” says the RICS research.

Rents around the country

Tenant referencing firm Homelet has revealed the average rent for a new tenancy in February 2023 was £1,175 monthly - up 9.9 per cent from February last year.

Homelet’s monthly rental market report says every UK region has seen rent growth over the past 12 months.

London rents were up 12.4 per cent to an average of £1,975 monthly despite falling 0.7 per cent from January. Excluding the capital, UK rents rose 9 per cent in the year to an average of £983 a month.

London rents are booming again

Andy Halstead, HomeLet CEO, said: “A small decline in rental prices at the start of 2023 has not continued, with the average rental property in the UK again seeing a price rise.

“Something interesting is happening in the capital as the average rent in Greater London has decreased for the third month in a row, having climbed above the £2,000 a month mark in November for the first time. It is still early to predict if this will become a sustained pattern or if London will follow the pattern of the wider country and see prices rise again in the coming months.

“The rental market continues to suffer from a lack of available properties to meet surging demand, with many landlords choosing to leave the market. If the number of properties available fails to increase in line with demand, then prices will inevitably remain high and climb even higher as the battle between tenants to secure a property intensifies.”

How rents have changed since February 2022