RENTAL HOUSING DEMAND: THE STATS

Demand for private rental housing is at an all-time high according to a new survey of private landlords across England and Wales that found 57% confirmed that demand for homes to rent had increased during Q3 – up from 39% during Q2.

Research from Boomin has revealed that the total value of homes in England has increased by 80% over the last decade, driven by the value of homes in the rental market.

The NRLA research found that, at the onset of the first COVID lockdown in the second quarter of 2020, just 14% of landlords reported tenant demand has increased. In a sign of recovery in the market, landlords operating in London have seen a significant uptick in demand compared to the levels reported throughout the pandemic as workers returned to the capital.

68% of landlords operating in outer London reported that demand has increased, up from 25% in the third quarter of 2020. In central London, 54% reported increased demand, up from 16% at the same time last year.

Elsewhere, landlords operating in the South West reported the strongest demand with 79% saying that demand had increased in the third quarter of the year. This was followed by 74% in the South East (excluding London), 73% in Wales and 71% in the West Midlands.

However, despite the booming demand, the same proportion of landlords plan to reduce the number of properties they rent out as planned to increase them at 19%.

Housing Market vs Rental Market Values

Figures show that the combined markets currently total a value of £7.4 trillion, with the entire market increasing by 80% over the last decade.

The housing market is by far the largest when it comes to total market value at £4.6 trillion versus a total rental market value of £1.5 trillion.

However, as house prices have climbed even higher, the modern-day buyer has been priced out of the market until later in life, resulting in a lifestyle change towards renting for longer. Boomin says this change is evident when analysing the growth of each market, with the housing market increasing by 75% in value over the last 10 years, while homes in the rental sector have seen an increase of 105% in market value.

Perhaps unsurprisingly, London is home to the most valuable combined market at £1.8 trillion, but it doesn’t rank first when it comes to the total value of the housing market alone.

While the capital sits top of the pile with the most valuable rental market (£529 billion), it is, in fact, the South East that is home to the highest-value housing market with a total of just over £1 trillion.

Where the 10-year value is concerned, though, London tops the list, with the total market increasing by 97% in the last decade. The rental market has grown by 124% and the housing market has increased by 90% – beating all other regions across the board.

Conclusion

We are as a nation obsessed by property and home-ownership is one of the key milestones that we all strive to achieve in life. So, it’s hardly surprising that the total value of the nation’s ownership market is over three times that of the rental market and home-ownership remains the predominant style of living for the vast majority.

While the housing market still reigns supreme in terms of total size and value, there has been a far greater level of value growth across the private rental sector to accommodate this new way of living and this trend is apparent across all regions of the nation.

Those investing in property over the past decade have won hands down, but property investors and landlords especially it seems.