Mismatch between supply and demand

Demand for private rental housing is at an all-time high, according to new research being published by the National Residential Landlords Association.

 A survey of private landlords across England and Wales, conducted in partnership with the research consultancy BVA/BDRC, found that 57% confirmed that demand for homes to rent had increased in the third quarter of 2021 – up from 39% in the second quarter of the year.

At the onset of the first COVID lockdown in the second quarter of 2020, just 14% of landlords reported tenant demand having 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 demand having 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.

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%.

It comes as the Royal Institution of Chartered Surveyors has warned of rents increasing as a result of the “mismatch between supply and demand.”

Ben Beadle, Chief Executive of the National Residential Landlords Association, said:

“As demand picks up following lockdown measures, we need a stimulus to support responsible landlords to provide the homes to rent we vitally need. Without this, it will ultimately be tenants that suffer as a result of less choice, higher rents and the resulting difficulties they will encounter when looking to become homeowners”.

• BVA-BDRC conducted 621 interviews with members of the NRLA online between 5th and 27th September.
• RICS’ Residential Market Survey for October 2021 can be accessed at: https://www.rics.org/globalassets/rics-website/media/knowledge/research/market-surveys/uk-residential-market-survey-october-2021.pdf. It notes that: “On the back of this mismatch between supply and demand, near term rental growth expectations remain elevated, as a net balance of +54% of contributors anticipate rents rising over the coming three months. Interestingly, London now displays amongst the strongest expectations on this measure (net balance +74%). This represents a substantial turnaround considering rental expectations were firmly planted in negative territory across the capital between Q2 2020 and Q2 2021.”

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