After uncertainty hit the market following the vote for Brexit, low supply and rising property prices have seen the number of new lets overtake sales.
- The popularity of the private rented sector could see property rentals outstrip sales for the first time since the 1930s
- September saw a record amount of lets agreed and tenants renewing contracts as renting becomes an increasingly popular lifestyle choice
- Supply is the lowest in the north of England and the Midlands, with property on the market falling 11% since 2015
If homeownership levels continue to fall, 2017 could see more households let than sold since the 1930s.
Homeownership levels had already fallen to their lowest point in 30 years at the start of 2016 and the number of homes for sale remains near a record low, with prices rising.
Analysis of the number of homes advertised for sale and for rent online showed that over the past five years, rental activity was catching up with sales.
Johnny Morris, Research Director at Countrywide, said: “As some would-be buyers and sellers sit on their hands, Brexit-induced uncertainty has continued to boost the rental market … September saw record activity, with increasing numbers of lets agreed and tenants choosing to renew their contracts. On current trends 2017 could be the first time since the 1930s that more homes are let than sold.”
The latest report on asking prices, published by online estate agent Rightmove, showed that sellers coming on to the market in October asked 0.9% more for their properties than those putting their homes up for sale in September.
The average asking price for a home in England and Wales now stands at £309,122, just £1,349 below the record set in June.
Notably following the EU referendum, activity picked up the quickest and was busiest in the north of England. Across six regions of the north of England and the Midlands, homes for sale had fallen by 11% since 2015, giving buyers less room to negotiate on price. In contrast, in the south of England available stock increased by 16% year-on-year, while sales agreed were down by 10%.
Miles Shipside, Rightmove’s Director, commented: “After the referendum result and the usual summer slowdown, estate agents’ experiences appear to fall into one of two camps, with a definite north/south divide.”