10 new prospective renters for each available property in February – report

Around 10 new prospective rental sector tenants were registered for each available property in February, according to a property professionals’ body.

Although the average number of new applicants registered per agency branch decreased in February 2024, a reduction in stock levels has meant that demand continues to outstrip supply, Propertymark said.

Rental arrears remained fairly static in February 2024, the report said.

Nathan Emerson, Propertymark chief executive said: “In the residential lettings sector, tenant demand has marginally decreased.

“However, stock levels have also decreased and overall, demand continues to outpace supply, in fact, there were around 10 new applicants registered in February for each available property.

“Rents continue to fluctuate by location and property type, although there are some signs of stabilisation.”

The report is based on responses to a monthly survey of Propertymark member agents across the UK.

The findings were released as trade association UK Finance said that the value of new buy-to-let lending for the UK in the fourth quarter of 2023 was £6.3 billion – a 55.4% fall compared with the same quarter in the previous year.

In signs of mounting costs for landlords, the average interest rate across all new buy-to-let loans in the UK jumped to 5.70% in the fourth quarter of 2023, up from just under 3.67% a year earlier.

As 2023 drew to a close, there were 13,570 buy-to-let mortgages in arrears greater than 2.5% of the outstanding balance – 123.9% higher than in the same quarter a year previously.

Buy-to-let repossessions were 56.3% higher than a year earlier in the fourth quarter of 2023, with around 500 cases recorded.

A blog on the UK Finance website said: “With higher rates reducing profitability, we have seen weaker demand for new BTL (buy-to-let) loans for house purchase, starkly reflected in the value of new BTL house purchases falling 56% in (the fourth quarter of) 2023 compared with the final quarter of 2022.

“At £1.8 billion this was, excluding the housing market shutdown during the early pandemic months, the lowest level of activity since 2013.”

The blog, jointly written by Ermir Selmani, analyst, data and research at UK Finance and Ronnell Reffell, manager, mortgages policy at UK Finance, continued: “Just 0.68% of all BTL mortgages are in arrears – this is lower than in the residential sector, as it has been for many years.

“Mortgage lenders remain prepared to support landlords struggling with mortgage payments – offering forbearance tailored to the individual landlord’s circumstances. It is, therefore, vital that landlords reach out to their lender as soon as possible if concerned about their payments.

“Despite the current challenges facing the sector, rental demand remains strong, and most landlords are showing resilience.”