Supply-Demand Mismatch Persists: Agents Sound the Alarm. According to Propertymark, the ongoing disparity between supply and demand in the rental market persists. This challenging situation remains largely unaltered despite government interventions and modifications to legislative programs that have, in some cases, deterred potential landlords. Chief executive Nathan Emerson, in the organization’s latest market snapshot, emphasizes that these factors have contributed to a sustained tightness in the supply of rental properties.
On the demand side, there continues to be a surplus of prospective tenants seeking rental accommodations, significantly outnumbering the available rental properties. This persistent mismatch is an ongoing concern for both renters in search of suitable homes and landlords navigating an evolving rental landscape. In light of these challenges, finding solutions to bridge the gap between supply and demand remains a crucial focus for the rental market and policymakers alike.
The pressure on rental prices remains, although there are some signs of moderation in this month’s data compared to the previous month. In terms of figures, the number of new prospective tenants registering per member branch decreased from 121 in August 2023 to 96 in September 2023, likely influenced by seasonal variations in demand.
The average number of available rental properties per member branch in September stayed relatively consistent, with 11 properties, similar to the figure in August. It’s important to note that there has been minimal fluctuation in the supply levels over the past year. However, it’s crucial to highlight that this level of supply continues to significantly lag behind the current influx of new applicants registering for rental properties.
Despite a recent downward trend, it’s evident that demand, as indicated by registrations, continues to surpass supply. On the sales front, there has been a decline in the number of buyers, dropping to 60 in September from 81 in August. Some of this reduction may be attributed to seasonal patterns.
The average number of property viewings per unit remained steady in September at two, which is below the 18-month rolling average of three. Propertymark notes that this coincides with sluggish gross mortgage advances, particularly affecting landlord buyers whose share of the mortgage sector declined from 9.8 to 8.1 percent by mid-year, according to the most recent available data.
The quantity of new homes listed for sale per member branch has decreased from around 13 to 11. However, it’s worth noting that this supply level still exceeds the 12-month rolling average of nine properties per branch.
In September 2023, the average stock of available properties per member branch decreased from 45 in August to 39. Simultaneously, the average number of market appraisals conducted per member branch dropped from 25 to 20.
The monthly average of approximately eight sales agreed per branch remains consistent. Notably, fewer properties are now achieving prices above their asking prices, and the time required for contract exchanges is extending, with agents reporting more properties taking 17 or more weeks to finalize the exchange.
Nathan Emerson comments, “Uncertainty continues to impact the UK economy and the housing market. While the decision to hold interest rates in September provided some relief, it offers limited respite for those in need of remortgaging or those looking to enter the housing market with leverage. However, despite stubbornly high inflation, it’s showing positive movement for both households and businesses. In the residential sales sector, there has been a slight reduction in available properties in September 2023, reflecting ongoing market uncertainty. This trend is expected to stabilize in the short term. More concerning is that the majority of properties continue to sell below their asking price, indicating a pricing correction despite the ongoing increase in average house prices.”
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