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A new report reveals that demand continues to outstrip supply in the rental market. What does this mean for landlords and the wider private rental sector?  

Demand for rental properties saw a sharp increase in August, according to the latest data from Propertymark. The report found that in August, an average of 197 prospective tenants registered to member estate agent branches, compared to July’s average of 149.  

In contrast, the number of properties available to rent per branch dropped to an average of 11.  

Furthermore, 69% of surveyed agents reported they had seen rents increasing month-on-month on average in their branches throughout August.  

What does this mean for the PRS?  

Tenant demand continues to drive up rents in the PRS, but also places significant pressure on landlords. The CEO of Propertymark, Nathan Emerson, commented:  

“There has been little urgency from governments across the UK to address the supply and demand issue by incentivising investment for landlords. We continue to see this gap widen as more people come to the market to look for a home, with very few properties available to rent.  

“This continues to put pressure on rents as 68% of our member branches felt rents have risen compared to last month”.  

The sales market  

Positively, the sales market is seeing “early signs of forward momentum”, Propertymark reports. The average number of new prospective buyers registered per member branch increased from 64 in July to 81 in August.  

The viewing data also shows positive signs for the market. The number of properties available per member branch showed a slight rise to an average of 45 in August compared to July’s 38, with the number of agreed sales increasing by 9%.  

Emerson comments, “The sales market is strong as we see a 29% rise in the number of new properties for sale when compared with last month. This shows that many people are continuing to find an affordable middle ground when coming to the market with negotiations well underway.  

“We imagine this picture will only get stronger with more sales completing in the coming months given the recent positive news of inflation rates remaining unchanged. This will give much-needed encouragement to those buyers who were hesitant.”  

What do these findings mean for landlords?  

With tenant demand rising and the housing market showing positive signs of movement, it may be time to consider a new property investment. Zoopla’s latest house price index records UK house prices have fallen for the first time since 2012, with prices down -0.5% over the last 12 months.  

It may be that you find a new property at a competitive price to diversify your property portfolio. As demand only rises from tenants, you should expect a new investment to generate competitive rental yields to boost your portfolio and property investment journey.  

There’s no doubt that rising interest rates and increased legislation continue to pose challenges for landlords in the current market, but the sector still offers ample opportunity for property investors. Now, it’s worth having a portfolio health check to assess your properties' current performance and find new ways to boost your returns.  

Complete a property portfolio review request here. An expert broker will then be in touch to discuss your options.  

Alternatively, if you would like to discuss any other property finance plans you might have, call us on 0345 345 6788 or submit an enquiry here 

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