Between March and April 2010 the amount of rental property available on the market fell 9%. Stock levels are now 32.6% lower than the peak in May 2009. Since the start of 2010 stock levels have fallen consistently month on month and are now 16% below January’s levels with a 3.6% fall in February and a drop of 4.2% in March.
The lower level of stock and strengthening of rents is an indication that the rental market is gradually return–ing to equilibrium. With less surplus stock and rents now starting to rise modestly, there is more balance between landlords and tenants, and less scope for either party to dictate the terms of a tenancy.
The supply of houses available to rent fell 9.7% in April compared to March – the lowest level since July 2008. This pushed rents for this type of property up 0.9% to £854pcm. Since January the supply of houses for rent has fallen month on month and is now 21.5% below January’s stock levels. As stock has fallen, asking rents have risen consistently over the same period. In January asking rents for houses stood at £829pcm, rising to £840pcm in February, and £846pcm in March.
The number of flats to let also fell from March to April, by 9%. Since January the stock level of flats has fallen by 13% and now stands at its lowest level since November 2008. As a result asking rents for flats now stand at £767pcm, the highest they have been since February 2009. Between April and March asking rents remained steady but since January rents for flats have increased £15pcm from £752pcm in January to £761pcm in February and £767pcm in March and April.
Between March and April, four out of the ten regions suffered a monthly fall in asking rents. These were the North East (-1.3%), Scotland (-0.6%), Wales (-1.2%), and the East of England (-0.9%). However, in all the regions except Wales rents are higher than at the start of the year.
Nigel Lewis, property analyst at FindaProperty.com, said:
“The start of 2010 has been a strong period for the rental market. While there have been dips and jumps over the first four months the general trend for the UK has been asking rents rising steadily. The reason for this is consistent month on month falls in the number of properties available to rent. The gap between supply and price is narrowing and soon neither tenants nor landlords will have the stronger bargaining position. But the future of the rental market depends completely on how the sales market reacts
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