Countrywide has reported record demand saw 50,480 new tenants registered for rental accommodation in the second quarter of the year, which represents a 16% increase since the start of the year.
June saw the sharpest increase with over 18,000 new tenants registering, the highest number in a single month since records began, 22% more the previous month. The rise in demand is a sharp contrast to the fall in the number of new properties being offered, which has fallen 6% in the last three months.
The government’s increase in capital gains tax does not appear to have deterred new first time landlords coming to the market, which has increased by 6% since the last quarter. Countrywide says that fears that London landlords would be hit most by capital gains tax appear unfounded with a 4% increase in new landlords letting their properties.
The excessive level of demand has led to marginal increases in rental prices. As more families turn to renting, four bedroom properties have seen the highest increase, with the average rent rising to £1,090 per calendar month – a 4% increase compared to Q1 2010.
There is now an average of 5.5 tenants vying for each property compared to 4.9 tenants in the first three months of the year. The highest demand remains for two bedroom houses in the South West with 8.9 tenants vying for each property. This level of demand is having a significant impact on the market, with properties being snapped up within on average of two weeks – 3 days less that in Q1 and 6 days less in Q4 2009.
John Hards, Countrywide Residential Lettings, co-managing director, said: “The number of tenants’ entering the market is at unprecedented levels – and we have yet to enter the peak season. Student demand for private rental accommodation will increase further with university applications at record levels.
“The buy-to-let sector remains a good source of investment, however, the government need to do more to incentivise new landlords in order to appease the current shortage of properties. If tenant levels continue to rise at the same rate, this will be further exacerbated.”
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