The number of tenants fighting for each rental property is predicted to cool slightly by 2030. But the rental market will still be fiercely competitive.
While the number of homes to rent is expected to increase, the number of tenants is set to climb too, meaning the rental market will favour landlords for the foreseeable future.
According to the latest research by Zero Deposit, a company specialising in deposit alternatives, the ratio of tenants to available rental properties is forecast to ease by 2030, but it will still be tough out there for renters.
Here are the key numbers:
- In 2023, there were 4.939 million private rental homes in England, compared to 10.815 million private tenants. This means there were 2.19 renters for every rental property.
- By 2030, the number of private rental homes is expected to increase to 5.408 million, while the number of tenants will reach 11.146 million. This will leave us with a ratio of 2.06 renters for every rental property.
While the ratio is forecast to improve, the research suggests it will still be a landlord’s market with more than two tenants vying for every available home.
Why is the Rental Market So Competitive?
Demand for rental properties is high: With a shortage of affordable homes to buy, many people are forced to rent.
Limited new build homes: While more homes are being built, it’s not enough to keep up with demand. This applies to both the rental market and the wider housing market.
Labour’s new homes pledge: The Labour Party has pledged to build 1.5 million new homes, but this is mainly focused on addressing the wider housing crisis and increasing supply for homeowners. While some of these homes may be purchased by landlords, it’s unlikely to significantly impact the rental market imbalance.
What Does This Mean for Landlords?
- More tenants means more choice: With so many people wanting to rent, you’ll be spoilt for choice when it comes to picking the best tenants for your property.
- Hold the line on rent: The high demand for rental properties gives you a strong bargaining position.
- Attract tenants with extras: Things like deposit alternatives can help you stand out from the crowd.