Rental market to face spring supply issues
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Loading... - Kylie Smith
- 17 Jan 2022
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A rise in available stock, mortgage rates and overseas buyer numbers over the coming months are likely to see the UK sales market back on the path to more familiar operations.
However, according to the latest market analysis from Knight Frank, the journey back to normality for the lettings market in London and the Home Counties will take longer.
Students and corporate tenants account for a large part of demand, which has gotten stronger over the last 12 months as offices and Universities have re-opened. Supply has been more erratic over the same period. It surged at the start of last year as properties that would otherwise be used for short-lets and staycations moved onto the long-let market. As lockdown restrictions were relaxed, they switched back, meaning 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, as the chart below shows.
The numbers of corporate relocation enquiries were five times higher in the final quarter of last year than it was in Q2 2020. The enquiries come from companies of all sizes looking to relocate staff to the UK across a range of sectors including finance, tech and energy.
Meanwhile, the number of market valuation appraisals was only 38% higher. Appraisals take place when a prospective landlord values their property for the rental market and act as a leading indicator of supply.
There will be a steadier flow of students looking for rental properties in the early months of 2022 than in previous years, which will accentuate this imbalance.
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. Read More…
