Overall demand for rental properties across the UK has increased by 15% annually, while the supply of rental homes has dropped 17%, the Sequence report also shows.
Meanwhile, in London rents have reached a four year high, increasing 10% annually to £1,515 and tenant demand has been rising at more than nine times the rate of supply.
According to Stephen Nation, head of lettings for Sequence, which includes Barnard Marcus, William H Brown and Fox & Sons, the rental market in London is a hive of activity, with close to seven tenants chasing every available property.
‘Demand to rent in the capital is rising at more than nine times the rate of supply reaching a four year high of £1,515 per month, up 10% annually,’ he pointed out.
The report also shows that applications for buy to let mortgages have reached the highest level in 2014, so far increasing by 14% annually in June and 12% since May. Nation explained that buy to let mortgages are not subject to scrutiny under the new mortgage market rules and change to pension annuities has also encouraged more investors to look to property for their pension pot as house prices and rents continue to rise.
Nationally, excluding London, the number of viewings is up 6% annually and 2% since May, the highest number of viewings in one month since November 2011.
However, new agreed tenancies are flat on the month but up 17% annually, just off their September 2013 peak. The flat monthly growth means that the ratio of viewings to new tenancies has marginally increased to 7.0/1 from May, but annually it has dropped from 7.7/1. Nation said that this suggests that competition in the market is hotting up and when tenants view their ideal property they are moving more quickly to secure it.
London viewings have increased by 25% annually and by 2% on the month in June. New agreed tenancies are up 28% annually but are flat on the month. This has resulted in a slight increase in the ratio from 12.7/1 in May to 12.9/1 in June.
‘Across the country it is clear that the rental market is very active this year, which goes to show how a healthy rental market works independently of the sales market,’ added Nation.
