Demand for rental housing at a five year high
The demand for private rented housing has reached a five year high according to new research released by the National Residential Landlords Association following the easing of COVID restrictions.
The wide-ranging survey of private landlords across England and Wales, conducted in partnership with research consultancy BVA/BDRC, found that 39 per cent confirmed that demand for homes to rent had increased in the second quarter of 2021 – an eight per cent increase on the first quarter of the year.
This data also reveals that demand has reached a five-year high, with demand only reaching a similar peak in in the first quarter of 2016. BVA-BDRC observe that demand has increased largely due to the relaxation of COVID restrictions and a more buoyant economic outlook.
The figures mask a trend which is seeing a two-tier rental market developing across particular regions in England and Wales. In Yorkshire and the Humber, Wales, the South West and the South East over 60 per cent of landlords said that demand for homes to rent had increased. In stark contrast, just 15 per cent of landlords in Central London said demand had increased in the second quarter of the year, compared with 53 per cent who said it had fallen.
This supports the trend which has seen growing numbers of tenants looking to leave London in the wake of the growth in home working. Official data shows that in the year to July 2021 the capital was the only region of the country to see rents fall in real terms.
Despite an overall increase in demand, the proportion of landlords intending to buy property has fallen from the four year high of 19 per cent recorded in the first quarter of the year, to 14 per cent. In comparison, the proportion looking to divest has returned to 20 per cent, up three percentage points from the first quarter of the year.
As COVID restrictions are lifted, 55 per cent of landlords said that their lettings business will continue to be negatively impacted as a result of the pandemic. Again, this masks considerable regional variations. 81 per cent of those in Outer London and 78 per cent of those in Central London said they would be negatively impacted. At the other end of the spectrum, fewer than half, 49 per cent, of those in Yorkshire and the Humber said they would be negatively affected.
Chris Norris, Policy Director for the National Residential Landlords Association said:
“The evidence is clear that nationally whilst the demand for homes to rent is increasing, landlords are more reluctant to invest in new properties. The only losers will be tenants as they struggle to find the homes to rent they need. The Chancellor needs to recognise the harm being done by tax hikes imposed on the sector.
“It is clear that there is a significant flight of tenants from the capital in response to the COVID pandemic. With lockdown restrictions having ended, and offices beginning to reopen, the jury is out as to whether this trend will continue.”