Multi-coloured terraced houses, cloudy sky above

Category: prs

Rental property demand is at the highest level recorded since the first quarter of 2016 according to research by the National Residential Landlords Association (NRLA).

PRS survey

In the survey, of PRS landlords across England and Wales, 39% said demand had increased into the second quarter of 2021, 8% higher than the first quarter of the year.

This means that demand is at the highest it has been since early 2016.

The survey suggests that the spike is due to the relaxing of Covid restrictions, which are providing an optimistic economic outlook.

Two-tier rental market

The NRLA has also highlighted that a two-tier rental market is beginning to develop across the UK.

In regions such as Yorkshire and the Humber, Wales, the South West and the South East, the percentage of landlords reporting an increased demand was 60%.

This was in stark contrast to Central London, where just 15% of landlords said demand had increased.

53% of Central London landlords reported that demand had fallen in recent weeks.

However, this can continue to be attributed to the rise of home-working and lockdown restrictions.

With individuals feeling more confident and vaccines rolling out, there is likely to be a resurgence in popularity for London.

Not fixed yet

Although this is a largely positive message for the PRS, the rest of the report goes on to say that landlords are remaining cautious.

55% of landlords say their lettings business will continue to be negatively impacted by the pandemic.

This can be seen in some of the pandemic financial support, such as the furlough scheme, coming to an end next month and further tax that is going to be implemented.

The proportion of NRLA member landlords intending to buy property has fallen from the four year high of 19%, recorded in the first quarter of the year, to 14%.

Chris Norris, Policy Director for the National Residential Landlords Association commented:

“The evidence is clear that nationally whilst the demand for homes to rent is increasing, landlords are more reluctant to invest in new properties.

“The only losers will be tenants as they struggle to find the homes to rent they need. The Chancellor needs to recognise the harm being done by tax hikes imposed on the sector.

“It is clear that there is a significant flight of tenants from the capital in response to the pandemic. With lockdown restrictions ended, and offices beginning to reopen, the jury is out as to whether this trend will continue.”