Housing crisis means 21 hopeful tenants compete for each property

The scale of the crisis in the UK’s home rental sector means 21 prospective tenants are competing for every property that comes onto the market.
There are 24 per cent fewer homes available to rent in the UK now than before the pandemic, according to Zoopla, the property search website, which blamed the shortfall on the reluctance of landlords to either enter the market or add to their portfolios.
By its calculations, rents in the UK have risen by 30 per cent over the past three years. The annual pace of rental inflation has slowed to 5.4 per cent, although Zoopla noted that this was still ahead of the 5.1 per cent growth in average earnings over the past year.
As of July, the national average monthly rent currently stood at a record £1,245 — £63 more than last summer. Various regulatory and tax changes in recent years have dented landlords’ appetite to own and rent out property.
Richard Donnell, executive director at Zoopla, warned that any more changes in next month’s budget risked deepening the scale of the issue.
“Any new policy or tax changes that result in a reduction in supply will simply push rents higher, hitting low income renters hardest,” he said. “It is essential that policymakers focus on growing the stock of homes for rent as the primary route to slowing rental inflation and improving choice for renters. As things stand the growing unaffordability of renting is the only route to slower increases in rents.”
The number of people looking for rental homes has dropped from the pandemic peak and supply has increased, albeit from a very low base, over the past year. However, Zoopla said that there remain far more would-be tenants than available homes. On average, there are 21 people vying for every rental property — twice as many as before the pandemic.
There has been a “steady flow of landlords selling homes” since 2016, Zoopla said, although that has been compounded by a dearth of new landlords entering the sector.
With rents typically much more expensive in the big cities, tenants are increasingly looking to smaller towns in the suburbs for cheaper deals. Reflecting that, rents have risen by a double-digit percentage in towns such as Kilmarnock, Wolverhampton and Oldham over the past 12 months.
By contrast, rents in the major cities are up by 5.8 per cent compared with a year ago, while London rents have grown only 2.5 per cent in that time. “Rental inflation is slowing in some major cities where rents are high but they are still increasing quickly in more affordable areas,” Donnell said.
He expects that the “unaffordability of home ownership” will continue to push people towards renting instead, especially in southern England. With supply unlikely to dramatically improve any time soon, Zoopla expects the supply-demand imbalance to persist through 2025.