Competition among tenants in some parts of the UK is leading to landlords being inundated with enquiries as soon as they list a property available.
With early reports of a cooling off in the country’s housing market as people pause to reassess their situations amid higher borrowing rates and cost of living difficulties, the rental market is proving to be more in demand than ever.
This is in addition to the fact that huge numbers of people, particularly young professionals but increasingly older generations too, opt for the flexibility and lifestyle benefits that renting can offer, adding to the rise of ‘generation rent‘.
In new data released by lettingaproperty.com, an online lettings platform, the extent to which landlords are being flooded with interest from tenants has been revealed. It shows that the average number of viewing requests per rental property increased by more than 25% between Q2 2022 and Q3 2022.
It also demonstrates that initial data for October shows a further increase in interest, and even reports of several properties garnering 100 or more viewing requests. One particular landlord in London found 134 requests to view their property on the platform.
Landlords benefiting from fewer voids
As a result of the surging demand from tenants, landlords are often seeing greatly reduced void periods – where their property sits empty between tenants – which is having a hugely positive impact on overall returns.
The most recent figures show that the average time it takes landlords to let out their homes is now just four days, which doesn’t leave much time to have the property professionally cleaned, maintenance tasks completed and an inventory done before new tenants move in.
For some landlords, the demand is proving too great, with a number of owners pausing their listings while they deal with a backlog of enquiries and viewings. Landlords who do not employ a letting agent may become more likely to do so as they strive to keep up with the market.
Fierce competition
Jonathan Daines, founder and CEO at lettingaproperty.com, says: “We’ve seen a significant increase in property enquiries over recent months, with many landlords receiving more than 50 viewing requests and some receiving more than 100.
“It’s definitely a landlords’ market, with fierce competition for rental properties leaving many tenants disappointed.”
An inevitable effect of heightened competition in the private rented sector is the upwards pressure on rents. While this is partly due to tenants outbidding each other, and landlords being able to command higher rents, there are other factors at play, too.
Mortgage rates have been on the rise for several months since the Bank of England began to inch up its base rate to deal with inflation. Many landlords who are remortgaging now may have to pass these costs onto their tenants, along with higher costs elsewhere such as in building and maintenance work.
There has also been an increase in the quality of rental homes as landlords are taking more notice of a potential upcoming increase in minimum energy efficiency standards (MEES) in rental homes. Many investors are also opting for higher end properties to attract better tenants, while build-to-rent is also booming.
Commenting on the difficulties being faced by the market, Daines adds: “This is a testing time for the rental sector, with both tenants and landlords feeling the strain.
“Interest rate rises, falling rental stock, and increased competition between tenants are all interconnected. Eyes across the sector will be fixed on the Bank of England’s Monetary Policy Committee on 3rd November, as a further rate rise is likely to ratchet up pressure on the sector.”
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