Rental demand has increased by 13% annually, yet the number of properties up for rent has fallen by 4%, opening up the market for buy-to-let investors.
The Association of Residential Lettings Agents (ARLA) Propertymark recently released its Private Rented Sector Report for July. The report polled 191 ARLA members at the beginning of August on information regarding tenant demand, rental supply, and rent prices.
Increased demand for rental properties
In July, demand from prospective tenants in the UK’s private rental sector increased to the highest level so far in 2018 with September 2017 being the last time it’s been this high. There were 79 new prospective tenants registered per letting agent branch in July 2018, up from 71 tenants in June and 70 in July 2017.
Because of the increased demand, competition among tenants has also increased, which can push rent prices up. In June, 35% of tenants experienced rent hikes, but in July, it dropped slightly to 31%, which is the same for this time last year.
Rental supply falls
As the supply of rentals moved in the opposite direction of demand, the number of available properties for rent fell from 191 per letting branch in June to 184 in July. And year-on-year, supply is down by 4% from July 2017 when there was 192. Also, an average of four landlords per branch took their buy-to-let properties off the market, which is up from three in July 2017. However, a recent study showed that nearly a fifth of all UK landlords have declared their intentions to continue being active in the buy-to-let sector indefinitely.
With a supply and demand imbalance generating a level of demand for rental properties higher than current availability, now could be a good time to invest in buy-to-let properties, especially in areas of the UK that have become buy-to-let hotspots.