Rental market growth outstripped house price growth in June for the first time in almost two years, indicating that the rental sector continues to boom.
New information from the National Association of Estate Agents has indicated that the number of house hunters registering with estate agents has reached its highest level since August 2004, with 439 house hunters per member branch in June 2015.
The number of registered house hunters has risen over 15% since May, whereas the supply of houses has fallen from 46 to just 44 per branch. This follows the growing property trend within the UK, where demand continues to outstrip supply.
This supports recent research from estate agent Haart which has shown that 11 buyers are chasing every new property to come onto the market, creating intense competition which continues to drive up prices. In London, the number almost doubles to 20 to 1 per available house. This is undoubtedly a factor for the rapidly increasing house prices in London; the average price of a first time buyer home increased £4,150 in June, equivalent to £138 per day.
As the high demand pushes prices up, Brits have been moving away from the traditional ideal of property ownership. As demand in the rental market grows as first-time buyers cannot yet afford to get onto the property ladder, their only options are either staying at home or renting private accommodation. Indeed, the number of privately rented properties has never been higher in the UK. Moreover, private rents grew faster than house prices in June for the first time in nearly two years.
Even with the growing political pressure being placed on the private rental sector, the figures show that investors can continue to be confident that demand will stay high within the rental market. The government may have taken measures to cool the market down, but a Savills report shows that such measures ‘are unlikely to reverse the growing demand for private rented accommodation, nor are they likely to increase the supply of much-needed, good quality private rented stock that is crucial to meeting this demand’
Savills has predicted that between 2015 and 2019 across England and Wales the number of household that privately rent will increase by over 1 million. As such, buy-to-let investors can be confident that demand will remain high in the rental market and so will prices, especially in the capital.