No Change! Agents warn that supply-demand mismatch still serious

Propertymark says there’s no change in the mismatch between supply and demand in the rental market - unfortunately.

Chief executive Nathan Emerson, in the body’s latest market snapshot, says: “Governments across the UK continue to tinker with legislation and legislative programs, disincentivising landlords along the way. 

“Supply remains tight with far more applicant registrations than properties available.

“Pressure on rents continues although there are some signs of restraint in this months figures compared to last month.

In terms of numbers, new prospective tenants registered per member branch dropped to 96 in September 2023 from 121 in August 2023, which is likely due to seasonal fluctuations in demand.

The average number of properties available to rent per member branch in September remained broadly the same as in August at 11 properties. 

It should be noted that there has been little fluctuation in supply levels over the last 12 months. However, this level of supply remains drastically below the current level of new applicants registered. 

Although there has been a downward trend over the last few months, it is clear that demand (in the form of registrations) continues to outpace supply.

On the sales side there’s been a reduction in buyer numbers to 60 in September from 81 in August - although at least some of this is likely to be down to seasonal trends.

The average number of viewings per property remained static in September at two, which is lower than the 18-month rolling average of three. 

Propertymark says this comes just as gross mortgage advances have been sluggish, especially for landlord buyers whose share of the mortgage sector slipped from 9.8 to 8.1 per cent by mid-year - the latest data available.

The number of new homes placed for sale per member branch has decreased from a round 13 to 11 although that supply remains above the 12-month rolling average of nine per branch.

The average stock of properties available for sale per member branch decreased from 45 in August to 39 in September 2023, while the average number of market appraisals conducted per member branch fell to 20 from 25.

Around eight sales agreed per branch remains the monthly norm, while very few properties now sell for above the asking price and the time taken to exchange contracts is elongating with agents reporting more properties taking 17+ weeks for exchange to take place. 

Emerson says: “Uncertainty continues to pervade the UK economy and the housing market in general. 

“Whilst the interest rate hold in September was good news, it offers little respite for those who need to remortgage or those seeking leveraged entry into the housing market. However, despite inflation remaining stubbornly high, it is moving in the right direction for both households and businesses. 

“In the residential sales sector, there has been a slight reduction in the number of available properties in September 2023. This reflects ongoing market uncertainty, but we expect this trend to level out in the short term. More concerningly, the vast majority of properties continue to sell below asking price pointing to a pricing correction despite average house prices continuing to rise.”

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