The latest data from Barrows and Forrester’s Rental Demand Index shows a slight decline in the nation’s rental market in Q2 2023, although the Midlands region is registering robust growth.
Dorset has emerged as the most sought-after spot for tenants, while Herefordshire has seen the highest quarter-on-quarter growth.
The Rental Demand Index from Barrows and Forrester analyses tenant demand for rental homes across all counties in England. It is based on the proportion of available rental stock that has been marked as let agreed.
Nationwide, 35.6% of England’s rental properties have been claimed by tenants in Q2 2023, representing a decrease of 0.2% compared to Q1 and a 3.5% reduction year-on-year.
Dorset is currently leading England’s rental market, with demand at 59.3%. West Sussex (58.1%), Rutland (55.8%), Somerset (54.1%), and Wiltshire (53.9%) are also seeing strong tenant demand. In contrast, Leicestershire (23.7%), Merseyside (24.7%), and Nottinghamshire (25%) have the lowest demand in Q2 2023.
On the quarterly change front, the Midlands are witnessing significant growth. Herefordshire reported the biggest increase at 7.8%, followed by West Midlands (6.6%), Tyne & Wear (6.3%), and Northumberland (6%).
However, Cornwall, which had the strongest rental demand in Q1, saw the most significant quarterly drop at 14.4%, followed by Shropshire (-7.1%) and Essex (-4.9%).
In terms of annual growth, Rutland leads with a 7.8% increase in rental demand compared to last year.
Staffordshire and Herefordshire follow with annual rises of 5.6% and 5.3%, respectively. The City of Bristol (-13.5%), Warwickshire (-12.2%), and Nottinghamshire (-10.5%) reported the largest annual drops in demand.
James Forrester, managing director of Barrows and Forrester, said, “While topline demand for rental homes has remained largely static during Q2, we’re seeing strong demand in many areas, which is good news for landlords.
“The key to successful buy-to-let investment is finding consistency with tenants and avoiding void periods.
“As the rent reform bill approaches, potentially making no-fault evictions more difficult, it will be interesting to see how rental stock and demand are impacted.
“Despite challenging times for landlords, the market remains in good stead.”
