Demand for rental homes in England dropped by 7.3% from Q3 to Q4 2024, with an annual decrease of 2.6%, according to research by Zero Deposit.
The analysis looked at rental demand based on the number of available properties that had let agreed as a proportion of total rental stock.
During Q4 2024, the national rental demand index showed a figure of 27.7%, marking a decline of 7.3% from the previous quarter and a drop of 2.6% since the beginning of the year.
While the overall trend pointed to decreasing demand, four counties saw increases in the last quarter.
Somerset experienced the largest rise at 3.2%, followed by Cornwall at 2.8%, North Yorkshire at 1.4%, and Warwickshire at 1.1%.
The City of London remained unchanged, but every other county reported a drop in demand.
Leicestershire had the largest decline, with demand falling by 15%.
Other significant drops were seen in the Isle of Wight at 12.1%, West Midlands County at 11.9%, Devon at 11.6%, and Buckinghamshire at 11.5%.
Somerset had the highest rental demand, with 50.8% of homes taken by tenants.
In West Sussex, 47.3% of rentals were occupied, while demand in Suffolk stood at 43%, Bedfordshire at 42.1%, Wiltshire at 41.7%, Cornwall at 40.1%, and Warwickshire at 40%.
The lowest rental demands were in West Yorkshire at 16.6%, Nottinghamshire at 17%, and Leicestershire at 17.5%.
Sam Reynolds, CEO of Zero Deposit, said: “A reduction in rental demand during the final quarter of last year may suggest that the current rental crisis is easing but this is far from the reality.
“The market continues to suffer from a severe imbalance when it comes to the demand seen for rental properties versus the supply of stock available across the market.
Reynolds added: “Despite this, the rental market isn’t immune to the seasonal trends that impact the rest of the property sector, and so the decline in demand seen during Q4 can almost certainly be attributed to these seasonal factors.
“In the run-up to Christmas, many tenants will have already made their move, and those who haven’t are more likely to put their plans on hold until the dust has settled on the festive period.
“Now that a new year is underway, we expect demand will once again start to climb and as tenants look to make their move.”
