Housing crisis for renters as market shifts

While there are homes to buy, tenants will struggle to rent due to a lack of rental stock and high demand, new data shows.

The information and marketing services company TwentyCi has published its End of Year Summary Report for 2022 which reveals that the residential lettings sector has seen a significant decrease in the supply of homes.

This lack of supply has hit renters hard as the average monthly rent is now £1,652, an increase of more than £200 since 2021 and almost £300 since 2019.

The trend of higher rent prices is set to continue in 2023, the firm says, with higher interest rates and inflation pushing up landlord costs – and these may be passed on by landlords.

The report also identified that landlords are leaving the rental sector as a result of regulations, taxes and rising costs.

New instructions are down by 7.8% compared to 2021, and by more than 25% since 2019.

Supply pressures for rental lets across the UK

The report highlights that London, Manchester and Edinburgh have seen a big drop in the number of lets agreed in 2022 due to the lack of supply.

Elsewhere, numbers were generally low with the exception of Peterborough and the South West which showed some modest growth last year.

The lack of rental properties in the UK has deteriorated significantly in the past year as all regions aside from inner London sit between 1.5 and 3 months of stock.

Any improvement in rental stock availability remains to be seen as rising interest rates and mortgage availability continue to dominate the sector.

Also, potential legislative changes are helping to make the buy to let sector less enticing to landlords.

Owner-occupied sales

In other data, 2022 saw 1.2 million sales transactions within the owner-occupied market – but that’s a fall of 14.3% since 2021.

However, this is in line with 2019 and with the supply of houses coming onto the market now back to normal levels, downward pressure on prices will continue and a similar number of transactions are expected in 2023.

Colin Bradshaw, the managing director, at TwentyCi  said: “2022 was a turbulent year when the widely anticipated housing market re-calibration began to take effect.

“We’ve seen some key shifts; most markedly in the stock situations for both the owner-occupied and lettings markets.”

He added: “With the cost-of-living crisis continuing to deepen, 2023 looks set to be another fast-changing year and it will be important to keep on top of market trends.”

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