Rental demand is finally slowing
We reported last month that the imbalance between rental demand and supply was the worst we'd ever seen it in over 20 years of running flatshare sites. Read 'How section 24 caused rental chaos' to see our explanation and analysis, in case you missed it first time round.
Over the past few weeks it looks like the peak has passed and things are starting to slowly ease. Not only has demand started to fall, we've also seen a slight upturn in the number of rooms on the market too.
First, here's the UK picture:
As you can see, the number of people looking for a room peaked a couple of months ago (August), then fell slightly in September and dropped more sharply in October. We've seen further falls in the first couple of weeks of November too so, although demand in October was still higher than at any point in the past three years, we expect that to come down further in November and December.
At the same time, the number of rooms being advertised went up in October and has also contined to climb in the opening weeks of November.
Now for the London picture:
You can see from the blue line that things in London took slightly longer to turn around - the number of people looking still rose slightly in September, before falling sharply in October. We've also seen an upturn in rooms being advertised in London, although that's harder to see from the graph.
One thing to point out is that the market generally calms down at this time of the year, as people tend not to want to move in the run up to (or over) Christmas. January is a busy month every year though, so we expect to see things kick back in, as they always do, in the new year. But what we don't know yet is whether the extreme peak in demand we saw in the summer (down to pent up demand over the pandemic, coupled with the huge numbers of people either going back to university or moving out of family homes post-covid) has passed, or if there's more to come in the new year.
We're still likely to face issues around supply of rental properties until government takes real steps to fix housing supply - that's not going away any time soon. But hopefully the unprecendented demand we've seen was down to a 'perfect storm' of circumstances and isn't the new normal.
We'll be keeping a close eye on the stats over the coming weeks and months and will keep you up to date.
Image credit - Gleren Meneghin