Rental stock plunges below pre-pandemic levels as returning tenants continue to drive market revival
Research by specialist property lending expert, Octane Capital, has revealed how rental market stock levels have plummeted across the UK’s major cities, as a return in tenant demand has driven a rental market revival.
Octane Capital analysed the level of rental stock across 21 major UK cities and how this availability of rental homes has changed during the pandemic.
The research shows that during the final stages of 2019 and prior to the pandemic, there were a total of 82,726 rental homes available to tenants across these 21 cities.
By the start of the pandemic in January 2020, this had already climbed by 17% to a total of 96,735 and this rental stock surplus continued to increase throughout the pandemic, hitting a high of 171,080 at the end of 2020 – a 107% increase compared to the pre-pandemic market.
However, as restrictions eased, trickles of tenant demand started to return and the research by Octane Capital shows that by this time last year, available rental stock levels had fallen from their high of 171,080 to 145,196 – a -15% decline.
Fast forward to today and with all restrictions now lifted, the rental market seems to be making a full return to health. The latest figures from Octane capital show that currently, there are just 64,839 rental properties listed across these 21 major UK cities.
This marks a -55% annual decline in rental stock availability and -62% reduction compared to the pandemic high in surplus rental stock that was sat dormant on the market.
London has seen the largest return to form of all cities when compared to this pandemic peak in available rental properties at the end of 2020.
The level of currently available rental homes has fallen by -74% across the capital, while Edinburgh (-69%), Aberdeen (-64%), Newcastle (-62%) and Cardiff (-59%) have also seen some of the largest reductions when comparing current levels to the highs seen in December 2020.
CEO of Octane Capital, Jonathan Samuels, commented: “The rental market revival is in full swing and the recent decision to lift all remaining Covid protocols will have only bolstered this confidence further, as tenants return to our major cities in their droves to both live and work.
“This will make for extremely welcome reading by the nation’s landlords who have suffered greatly due to dwindling demand during the pandemic, forcing them to massively reduce their rental income expectations while also suffering from lengthy void periods.
“It’s fair to say that we couldn’t find ourselves in a more different place at present and if anything, there is now a shortage of suitable rental stock to meet this returning demand. As a result, we’re seeing sharp growth in rental incomes and while this won’t negate the impact of the last two years, it will certainly help steady the ship moving forward.”