The rental supply-demand imbalance is only likely to worsen in the near-term future, according to Bloomberg Intelligence.
Rightmove recently released data showing the number of available rental properties in London was 46% below the level of 2019, and Iwona Hovenko, real estate analyst at Bloomberg Intelligence, believes supply is set to be squeezed further across the UK.
Hovenko cites “smaller private landlords exit the sector due to high taxation, interest rates and the steep costs to bring their properties to at least EPC band C in the next few years” as reasons why the supply-demand imbalance will increase further in the near future.
Shortage of qualified labour and the still-high prices of materials will make the job of bringing properties up to energy efficiency standards even tougher, she said.
“Moreover, the same factors are also hitting the supply of new homes,” Hovenko added.
The analyst also observed that some would-be buyers may have shelved their purchase plans while waiting for house prices to fall.
She added: “Although the housing market remains relatively resilient, the ranks of renters may continue expanding due to potential buyers being priced out by the high-interest rates, lower mortgage affordability, as well as squeezed disposable incomes.
“All of these factors may be exacerbating demand for rental housing at a time when supply is likely to shrink further.”