Crisis Point! Supply now “drastically low” compared to demand

It’s getting worse - the supply-demand mismatch in the rental sector is now “drastic” says Propertymark.

The number of new prospective tenants registered per member branch showed a further climb. August had an average of 197 prospective tenants registering compared to 149 in July 2022. 

Figures in August 2023 were up almost 32 per cent year on year and demonstrate a trend that continues to spiral, says Propertymark.

The number of properties available to rent per member branch dipped in August to an average of 11 - this is “drastically below what is needed to keep up with current market demand” warns the agents’ body.

Meanwhile there was an average of 17 new prospective tenants registered per available property at each member branch across August. 

A worried Nathan Emerson, Propertymark chief executive, says: “There is little urgency from Governments across the UK to address the supply and demand issue by incentivizing investment for landlords. We continue to see this gap widen as more people come to the market to look for a home, with very few properties available to rent.

“This continues to put pressure on rents as 68 per cent of our member branches felt rents have risen compared to last month.” 

Meanwhile on the sales side, we might be at the start of an improving housing market, suggests Propertymark.

It says that while inflation and interest rates remain higher than previous years, “we are however likely to be reaching the peak of that curve” with “very early signs of forward motion again.” 

The average number of new prospective buyers registered per member branch is up to an average of 81 in August 2023 from 64 in July 2023.  

The average number of viewings per property is also starting to show potential early signs of forward momentum once again. In August 2023 the average number of viewings per available property was 2.0 compared to 1.5 in July 2023. 

The agents’ trade body says this indicates the possible balance of higher interest rates and in some cases lower house prices has equalised and is enabling people to consider a property transaction more easily than earlier this year. 

The supply of new homes placed for sale per member branch showed another positive uplift in August 2023 – now at an average of 13 per member branch. 

“The sales market is strong as we see a 29 per cent rise in the number of new properties for sale when compared with last month. This shows that many people are continuing to find an affordable middle ground when coming to the market with negotiations well underway” explains Nathan Emerson.

“We imagine this picture will only get stronger with more sales completing in the coming months given the recent positive news of inflation rates remaining unchanged, given much needed encouragement to those buyers who were hesitant.”

The average number of properties available per member branch showed a positive climb to an average of 45 in August compared to 38 in July, and this represents the highest figure since pre-Covid. 

The average number of market appraisals conducted per member branch also showed an upbeat picture - up from an average of 21 in July 2023 to 25 in August 2023.