According to research from ARLA Propertymark, the number of rental properties that letting agents managed fell by 5 per cent in February 2018. This meant that the average number of properties available at each branch came in at an average of 175, compared to 184 in January.
- The number of rental homes available for tenants fell in February 2018
- Demand from prospective renters also dropped
- The rate of tenants experiencing rent rises increased in frequency as well but is overall better than in February 2017
- ARLA Propertymark issues its February Private Rented Sector (PRS) report
Supply of rental stock
Supply has not been this low since May 2016, when it stood at 171. In February 2017, letting agents managed 183 on average per branch, 176 on average in February 2016 and 184 on average per branch in February 2015.
Demand for rental properties
Demand for rental accommodation also dipped in February. On average, letting agents registered 61 prospective tenants per branch in February, compared to 70 in January, a 13 per cent decrease.
One in five (20 per cent) tenants experienced rent hikes in February, compared to 19 per cent in January. This figure is down year on year; In February 2017, 25 per cent of tenants had their rents increased, 29 per cent were subject to rent rises in February 2016 and 31% experienced hikes in February 2015.
What could be responsible for the drop in properties available?
It seems likely that the reduction of properties available is in part seasonal – we’re now a few months into 2018, so the demand for new changes and homes has decreased. However, David Cox, the chief executive of Propertymark, says this could be due to the new Minimum Energy Efficiency Standards (MEES).
David Cox, ARLA Propertymark Chief Executive, says: “This month’s results continue to show a drop in the supply of rental properties and this is no surprise; the minimum energy efficiency standards come into effect in April meaning all rental properties must be EPC rated E or above.
“The dip in supply indicates that landlords are cutting it fine and taking their properties off the market to make the necessary changes before the deadline – but we could also see up to 300,000 properties taken off the after the deadline passes on Sunday because they don’t reach the minimum requirements.
“This is also likely to push rent costs up as competition heats up among prospective tenants. We could have a supply crisis on our hands and for landlords who haven’t yet started to upgrade their properties, now is the time to act and fast.”
This also is in line with research published recently by our team here at Just Landlords, surrounding the lack of awareness around the new regulations. Our buy to let expert Rose Jinks comments, “The fact that our survey found that less than four in ten people in the market are even aware of how improving your EPC could save them money is shocking. The fact that our survey found that less than four in ten people in the market are even aware of how improving your EPC could save them money is shocking.” This could be a contributing factor to the number of properties available on the market, as from the 1st of April 2018, without a valid EPC rating, it will become illegal for landlords to grant new leases – even to existing tenants.