The latest Rental Demand Index from estate and lettings agent Barrows and Forrester has revealed that Dorset is currently the hottest spot in the nation’s rental market in terms of current tenant demand, but that Herefordshire is leading the pack when it comes to quarterly growth.
The Rental Demand Index by Barrows and Forrester gauges tenant demand for rental homes across each county of England based on the level of available rental stock that has already been marked as let agreed.
The latest index for Q2 2023 shows that 35.6% of England’s rental stock has already been snapped up by eager tenants. This marks a marginal nationwide decline in demand versus the first quarter of the year, down -0.2% and a -3.5% annual reduction.
Current hottest spots for rental demand
In terms of the hottest spots in England’s rental market, Dorset tops the table with current rental demand sitting at 59.3%.
In West Sussex, demand measures 58.1%, and tenant appetites are also strong in Rutland (55.8%), Somerset (54.1%), and Wiltshire (53.9%).
On the other hand, the coldest spots for rental demand in Q2 2023 are Leicestershire (23.7%), Merseyside (24.7%), and Nottinghamshire (25%).
In terms of quarterly growth, the Midlands is leading the way with the biggest increase being recorded in Herefordshire (+7.8%), followed by the West Midlands (+6.6%), Tyne & Wear (+6.3%), and Northumberland (+6%).
The biggest quarterly drops have been recorded in Cornwall (-14.4%), followed by Shropshire (-7.1%) and Essex (-4.9%).
The local market to have seen the biggest annual growth is Rutland where rental demand is up +7.8% compared to this time last year. Staffordshire has seen an annual rise of +5.6%, followed by Herefordshire at +5.3%.
The largest annual drops in demand have been recorded in the City of Bristol (-13.5%), Warwickshire (-12.2%), and Nottinghamshire (-10.5%).
James Forrester, Managing Director of Barrows and Forrester, comments: “Topline demand for rental homes has remained largely static during the second quarter of this year and this suggests that many tenants are sitting tight during times of economic uncertainty.
“That said, the market is generally in a state of limbo during this time of year as many tenants have already made their move whether it be for education or work purposes.
“There remains, however, a strong level of demand in many areas and this is encouraging news for the nation’s landlords. While the success of a buy-to-let investment may be primarily focussed on the yield available, it’s also about finding consistency with tenants and avoiding void periods.
“It will be interesting to see what impact the incoming rent reform bill will have on rental stock and, therefore, demand when it becomes more difficult to execute no-fault evictions, however, the market remains in good stead despite a difficult few years for landlords.”