Mismatch between supply and demand widens

The mismatch between supply and demand is putting huge pressure on renters, according to a new report.

The latest figures from Propertymark’s Housing Insight report reveal a 38% increase in the number of prospective tenants looking for a property compared to July 2022.

However, the number of properties available has only risen by 24% meaning the gap between supply and demand is widening.

Fundamental problem of undersupply

According to the report, 70% of Propertymark letting agents reported rents increasing month-on-month on average at their branch in July 2023.

The rise in rents has caused 6% of tenants to fall into arrears compared to 3% in February 2023.

Nathan Emerson, chief executive officer, at Propertymark, said: “In the lettings market, we continue to see an alarming disparity in the number of homes available to rent when compared with growing demand from prospective tenants.

“Governments across the UK need to urgently address the fundamental problem of undersupply and look to adequately incentivise the provision of desperately needed homes in the private rented sector.”

Sales market remains buoyant despite rising mortgage rates

In the housing market, the report reveals a 98% reduction in the average number of sales viewings per property compared with August 2022.

The average number of viewings per property continued to fall back from its recent peak in April 2023. In July, the average number of viewings per available property was 1.5 in July compared to three in June 2023.

Propertymark says this shows that those looking to buy are determined to do so and are acting quickly to secure their property.

The supply of new homes placed for sale per member branch showed a lift in July – now at 10% per member branch. The average number of sales agreed per member branch also showed an uplift to eight in July.

Mr Emerson added: “The sales market remains buoyant despite rising mortgage rates with the number of sales agreed in July at eight per member branch, this is broadly in line with what was reported during the busy market period in July 2022.

“As the number of viewings and valuations drop, this indicates a shift to only the more serious homebuyers and sellers are remaining proactive in the market. Those properties that are currently for sale with motivated vendors in line with the market are selling quickly.”

The full report can be read here.

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