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Demand For Rental Property In The UK Increases

Where To Invest

For property investors currently looking at the UK housing market, the current high rental demand is something to consider. When demand is high, void periods tend to be lower. Reducing the risk of an investment property sitting empty and untenanted has a major impact on return on investment, as well as lowering risk levels for the investor.

Rightmove has revealed where tenant demand is currently the highest, on a regional basis. The south-west leads the way, where demand for lettings is now 34% higher than it was at the end of May 2019. This is closely followed by the East Midlands (33%) and the West Midlands (31%), both of which are already extremely popular areas for rental property investment.

After this, the south-east is now seeing demand levels at 28% higher than they were a year ago. Yorkshire and the Humber (26%), the east of England (25%), London (23%) and the North-West (21%) finish the list. Interestingly, the north-west region has seen the highest year-on-year increase in demand for sales.

Market Gap

Right now, according to the data, the supply of rental homes is lagging behind demand. Rightmove says that the number of new rental listings is currently 4% lower than this time last year. In the week of 6th April, it fell to a massive 64% below 2019’s levels.

Miles Shipside believes the lack of available rental properties could push up rent prices. It also leaves more scope for landlords to be more selective with their tenants.

“They [landlords] are going to pick those with the best references and who can move in immediately. Those whose credit record is not the best tend to lose out,” he added.

The UK’s rental market has been a growing sector for the past 20 years. As people’s attitudes towards renting have changed, coupled with affordability issues, it has begun to become more of a lifestyle choice for thousands. The advent of the build-to-rent sector is a good example of how tenants now expect a higher standard of living from their rental homes, and are willing to put home buying plans on hold while they prioritise living in their chosen location for longer.