Tenant demand for rental homes in England climbed by 1.7% between Q2 and Q3 2024, while demand since the start of the year has increased by 3.3%, research by Zero Deposit has revealed.
Zero Deposit analysed rental demand across each county in England based on the number of available rental properties that have already seen a let agreed as a proportion of total rental stock available.
Rental demand across England sat at 35.1% during Q3, meaning that more than a third of all rental properties listed on the market had found a tenant.
This marked a quarterly increase of 1.7%, as well as a 3.3% increase since the start of 2024.
West Midlands County recorded the largest quarterly increase of all English counties, with rental demand climbing by 5.6% between Q2 and Q3 2024.
The second largest tenant demand increase was recorded in Leicestershire at 5.2%, with West Yorkshire (4.5%), Greater London (4.1%), and Devon (4%) completing the top five.
England’s strongest rental market was in West Sussex, where tenant demand of 55% was highest across all counties for Q3 2024.
In Wiltshire, 50.1% of all rental properties have secured tenants, while demand was also strong in Hertfordshire (48.4%), Somerset (47.6%), and Cambridgeshire (47.4%)
However, in Nottinghamshire, just 20.8% of all rental properties were successfully let, while demand was also low in East Riding of Yorkshire (25.3%) and the City of London (26.2%).
Sam Reynolds, CEO of Zero Deposit, said: “We’re continuing to see good rental demand in England, especially when looking at the rate of growth since the beginning of 2024.
“It’s important to note, however, that the most sought-after markets remain very much in the southern counties of England.
“In fact, the 12 counties with the strongest demand are all located in the south, with Nottingham’s entry at number 13 being the first showing for any county in the midlands or north of England.”
He added: “While things are looking quite good for Enlgland’s rental market, there are two things on the horizon that are sure to have a big impact on tenant demand.
“The first is the Renter’s Rights Bill which is designed to protect tenants and give them a more secure rental experience.
“This added tenant confidence could bring more people into the rental market.
“However, there is also the fact that the new bill makes it harder for landlords to remove tenants.
“This may act to reduce supply as more tenants stay put for longer periods of time, reducing market churn.”
Reynolds continued: “Then we have the upcoming changes to Capital Gains Tax that are widely expected to be announced during the Government’s Autumn Budget on 30th October.
“If Labour does what they’re expected to do and increases the tax payable on Capital Gains, it could deter landlords from the private rental sector.
“This will result in stock levels falling which inevitably leads to an increase in demand statistics.
“However, as demand increases, so too does price.
“So, we could also see the rising cost of rent impacting the number of people who feel they can afford to rent with many instead choosing, for example, to continue living with other family members.”
