There were around 10 new renters for every rental property available on the market in February, according to a survey carried out by Propertymark.
Despite a slight fall in the number of new applicants per agency branch in February 2024, a decrease in available housing meant that demand still outpaced supply, said Propertymark. Rent arrears remained mostly unchanged in February 2024 according to the report.
Nathan Emerson chief executive of Propertymark, said: "In the residential lettings sector, tenant demand has marginally decreased. However, stock levels have also decreased and overall, demand continues to outpace supply, in fact, there were around 10 new applicants registered in February for each available property."
"Rents continue to fluctuate by location and property type, although there are some signs of stabilisation." The information was gathered through a monthly survey of Propertymark agents across the UK.
Furthermore, UK Finance revealed that the amount of new buy-to-let borrowing in the UK during Q4 2023 was £6.3billion - a significant 55.4% drop from the same period the year before. With costs escalating for landlords, the average interest rate for all new buy-to-let loans in the UK rose to 5.7% in Q4 2023, an increase from nearly 3.67% the year prior.
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By end of 2023, a jump of 123.9% was seen in buy-to-let mortgages with arrears greater than 2.5% of the balance, hitting 13,570 marking a significant increase from the previous year. In the last quarter of 2023, there were above 500 cases recorded where houses were taken back because payments weren't made.
This is 56.3% more than what we saw in the same timeframe the year before. A blog post on the UK Finance website said: "With higher rates reducing profitability, we have seen weaker demand for new BTL (buy-to-let) loans for house purchase, starkly reflected in the value of new BTL house purchases falling 56% in (the fourth quarter of) 2023 compared with the final quarter of 2022."
The lowest level of activity since 2013 happened where people buying property to rent out only spent £1.8billion in the last quarter of 2023 - this is not counting the time during the pandemic. Ermir Selmani and Ronnell Reffell, who both work at UK Finance, also noted in the blog: "Just 0.68% of all BTL mortgages are in arrears this is lower than in the residential sector, as it has been for many years."
They reassured that: "Mortgage lenders remain prepared to support landlords struggling with mortgage payments offering forbearance tailored to the individual landlord's circumstances. It is, therefore, vital that landlords reach out to their lender as soon as possible if concerned about their payments."
They concluded by saying: "Despite the current challenges facing the sector, rental demand remains strong, and most landlords are showing resilience."
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