How Renters are Finding Their Next Home
Rightmoves latest snapshot of the rental market shows how much busier it is now compared to the more normal levels of 2019, before the pandemic. Each rental property currently receives 17 enquiries from prospective tenants. While this is down from 26 a year ago, it’s still more than double the number of enquiries seen in 2019.
Average Search Area for Renters Expands Over 60% in Five Years
In response to high tenant demand, renters are now searching further afield for their next home compared to 2019. Over the past five years, the average search area has increased by more than 60%, growing from 40 sq km to over 100 sq km. This expansion is driven by several factors, including a shortage of rental properties and rising rents, which compel tenants to look beyond their usual areas to find homes within their budgets.
More Renters Seeking Homes Outside Cities
Rightmoves data indicates that most people tend to look for their next home in the same area where they currently live. However, during the pandemic, there was a notable trend of renters moving from cities to coastal or countryside locations. While this trend is reversing in the sales market, it persists in the rental market due to record-high rents.
For example, in London, 34% of renters are now looking to move outside the capital, up from 30% in 2021. In Leeds, 52% of renters are searching beyond the city, compared to 46% three years ago. Similarly, in Glasgow, 43% are looking outside the city, an increase of 4% since 2021.
Increased Need for Rental Homes
Currently, the number of available rental properties is 14% higher than this time last year, while tenant demand has decreased by 16%. Despite these improvements, the supply of rental homes remains 20% below 2019 levels, with 22% more tenants looking to move than in 2019. Our study estimates that around 120,000 additional rental properties are needed to bring rental price growth back to pre-pandemic levels.
There are some positive signs from the government regarding improvements for tenants, such as the introduction of the Renters’ Rights Bill, which aims to remove Section 21 evictions and enhance tenant protections. Additionally, Labour has pledged to build 1.5 million more homes, which could help increase the availability of rental properties.
Call for Government Support to Boost Rental Supply
Rightmove is advocating for further government support for landlords to encourage investment in the private rented sector. This includes assistance with making properties more energy-efficient. A balanced approach that recognises the importance of landlord investment will ultimately benefit tenants by providing a broader choice of higher-quality homes.