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.jpg "Forecast for tenant-rental property ratio will fall by 2030")
Image by Arek Socha from Pixabay
Zero Deposit’s latest research has found that while the ratio of renters to available rental properties is expected to improve by 2030, there will still be more than two renters per available rental property, highlighting the difficult task faced by those who rely on the rental sector to find a roof over their heads.
The company analysed historical market data on the number of private rented properties across England and the number of private renters, examining the market balance between the two and how this relationship is expected to change by 2030.
The research shows that in 2023 there were 4.939 million private rented properties across England, while there were almost 10.815 million private renters, a ratio of 2.19 renters per rental property.
“Therefore, it has never been more important for landlords and estate agents to offer their tenants choice…
This represents a year-on-year decline from the ratio of 2.22 in 2022 and is also below the pre-pandemic benchmark of 2.28 in 2019. It is also well below the ratio of 2.56 from 1991, the highest of all historical years analyzed by Zero Deposit.
Image by OpenClipart-Vectors on Pixabay
The good news is that, according to the study, the number of private tenants in relation to the supply of privately rented apartments will continue to decline by 2030.
The company forecasts that the number of privately rented properties will increase by 9.5% to just under 5.408 million by 2030. At the same time, the number of PRS tenants is expected to rise to 11.146 million, an increase of 3.1%.
As a result, they predict that there will be 2.06 tenants for every PRS property across England. According to CEO Sam Reynolds, this change represents a significant improvement, but one that is unlikely to tip the balance in tenants’ favour.
“Even though the ratio of tenants to available properties has improved over the past year, the rental sector remains an extremely competitive area. The imbalance between supply and demand is the driving factor that has led to a rapid increase in rents in recent years.
“PRS stocks are expected to continue to rise in the coming years, which should lead to a further easing of the renter-to-ownership ratio. This may be further boosted by Labour’s pledge to deliver 1.5 million new homes. However, Labour’s planned new stock is largely aimed at addressing the wider housing crisis and increasing supply for homeowners.
“While some of these homes will inevitably be purchased by landlords, this increase is unlikely to significantly address the supply and demand imbalance in the sector. We expect there will still be more than two tenants per PRS home, despite the forecast increase in inventory.
“As such, it has never been more important for landlords and letting agents to offer tenants choice, particularly to ensure landlords have access to the widest possible pool of tenants. Security deposit alternatives are just one tool that makes their properties significantly more attractive, as they give tenants the opportunity to move out without being deterred by the initial high cost of a rental deposit.”
View data tables here
