The firm’s analysis found that the volume of rental properties on the market declined by eight per cent in 2022, and has now dropped by a quarter (25 per cent) since 2019.
The firm found that in December 2022, the available stock for tenants was around 199,725 properties. By contrast, at the same point in December 2019, it stood at 328,412. TwentyEA noted that the volume of rental properties has been dropping consistently since March 2021.
Interestingly, TwentyEA suggested that demand for rental accommodation is also on the decline. For example, demand volumes dropped by four per cent in 2022 from the year before, and by 17 per cent from 2019.
However, the firm argued that underlying demand is still strong, should the supply be there, with the fall in demand being partly driven by the drop in rental supply.
Stuart Ducker, strategic solutions director of TwentyEA, said that there was simply too much demand and not enough supply within the rental market, noting that this is leading to an increase in rents. He pointed to the firm’s findings that average agreed let prices have grown by 8.5 per cent over the last year, and are up by 22 per cent since 2019.
“If government legislation on the private rental sector continues, and it looks like it will, expect prices to rise further if incomes rise,” he continued.
“Available lettings stock has fallen by 39 per cent in just three years. Increasing regulation in the PRS has made many landlords divest. This supply side, pitched against underlying demand for rental properties has created a perfect storm.”
Ducker suggested that it is likely that new lettings instructions will fall by a further five per cent this year, pushing yet more rental growth.
