Monday, 04 July 2022

Demand for rental homes to outstrip supply

THE demand for rental properties in London and the Home Counties is expected to increase this spring, while supply remains low, according to Tom Bill, Head of UK Residential Research at Knight Frank.

This is expected to drive up the cost of rent, at least in the short term.

Mr Bill said: “Everything points towards a scramble for stock this spring. Any rebalancing between supply and demand in the lettings market will only come later this year at the earliest.”

Increased demand is expected to come mainly from two market segments — students and people planning to relocate for work.

Mr Bill added: “There will be a steadier flow of students looking for rental properties in the early months of 2022 than in previous years.

“The first reason is that universities have staggered the return of face-to-face learning. Second, many of those who were unsuccessful in finding a property in time for September moved into temporary accommodation, which means they are still looking.”

Furthermore, a growing number of companies of all sizes are looking to relocate staff to and within the UK, across a range of industry sectors including finance, technology and energy.

The supply of rental property has fluctuated since the coronavirus pandemic began, and is now relatively low.

Mr Bill said: “Supply surged at the start of last year as properties that would otherwise be used for short lets and staycations moved into the long-term lettings market. As lockdown restrictions were relaxed, they switched back, meaning that prospective tenants were involved in a so-called sprint for stock.

“The stamp duty holiday exacerbated the situation, with many would-be landlords deciding to capitalise on the tax break by opting to sell.

“After some jitters before Christmas when the Omicron variant first appeared, students and companies are now activating their plans. Their problem is that supply remains tight.”

Property

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