Rental demand edges up during Q2

Posted on Tuesday, July 9, 2024

Despite the increase, demand is still off the pace set last year. 

The latest research by Zero Deposit has revealed that tenant demand for rental homes climbed by +1.5% between Q1 and Q2 2024, although demand remains -2.3% lower than this time last year.

Zero Deposit analysed rental demand across each county in England based on the number of available rental properties that have already seen a let agreed as a proportion of the total rental stock available.

National picture

The latest index by Zero Deposit shows that rental demand across England sat at 33.3% during the second quarter of this year, meaning that a third of all rental properties listed on the market had found a tenant.

While national demand sits some -2.3% below the levels seen this time last year, it does mark a +1.5% increase on a quarterly basis.

Quarterly movement

Herefordshire has seen the largest quarterly increase of all English counties, with rental demand climbing by +11.9% between Q1 and Q2 2024.

The City of London has seen the second largest quarterly increase, up +8.4%, with Northumberland (+7.3%), the West Midlands (+7.2%) and Cumbria (+6%) also making the top five largest quarterly increases.

Hottest and coldest current rental markets

When it comes to the hottest rental markets at present, West Sussex is home to the highest levels of tenant demand, with 57.2% of all rental properties having found a tenant during the second quarter of this year.

Somerset also ranks high where tenant demand sat at 53.7% in Q2, followed by Suffolk (53.4%), Dorset (53%) and Cornwall (49.9%).

In contrast, Nottingham was home to the lowest tenant demand levels where just 18.5% of all rental properties available in the current market had been let.

Sam Reynolds, CEO of Zero Deposit commented: “So far this year, tenant demand has continued to climb and we’ve seen an uplift in the number of available homes being let during Q2 when compared to the first three months of the year.

"Demand is particularly strong across a number of south coast hotspots and as we enter further into the summer months, this is likely to remain the case.

"However, demand for rental properties across the nation is still yet to return to the same levels seen last year and it’s clear that the ongoing issue of affordability is continuing to restrict the market, particularly in the current economic landscape.

"There are growing examples of later-stage dropouts and properties staying on the market for longer as renters have a greater choice of property and see less of a need to heavily compromise on their next home. We’re seeing record interest in our product from letting agents and landlords looking to increase their pool of tenants and reduce the time to let.

"In doing so, letting agents in low demand areas, in particular, are finding that they are able to boost rental demand levels, as they allow tenants an alternative path to securing a rental property.”

Via @PropertyReporter