The UK lettings market, after experiencing recent surges in prices, is now displaying signs of returning to its seasonal patterns.
This is despite the ongoing challenges due to the persistent imbalance between demand and supply.
This is the view of Nicky Stevenson, Managing Director of Fine & Country, who says: “The return to seasonality in the lettings market is a positive development, as it provides more predictability for both tenants and landlords. However, we must not underestimate the ongoing challenges.
“The demand for rental properties still greatly surpasses supply, driving rental prices up. The average monthly rent in the UK reached a new high of £1,283 in October, according to HomeLet.
“While prices are on the rise, the pace of growth has slightly slowed compared to the previous year, causing the annual growth rate to dip below 10 per cent for the first time since April.”
She notes that void periods have also lengthened, increasing from 14 to 18 days, as a sign that demand is cooling as we move into the quieter winter months.
Nevertheless, demand still far outweighs supply, with 52 per cent of agents reporting rising rents in September, though this is lower than the reported figures for July and August (71 and 68 per cent respectively).
“Tenant demand experienced a slight dip in September, which is a common occurrence following the busy summer rental season” says Stevenson.
Propertymark reports that September witnessed 96 prospective renters registered per branch, down from 121 in August.
“Despite this, the supply remains constrained, with Rightmove data revealing a 35 per cent decrease in the number of homes available to rent compared to 2019, though it is up by 14 per cent from last year,” Stevenson comments.
Looking at the prime market, Stevenson says that average monthly rents continued to rise in October, reaching £3,845.
This represents another monthly increase, with an annual growth rate of 7.6 per cent. Rents showed an increase in all regions, and the South West saw the most robust annual growth.