Last month, the number of rental homes on the market fell by double digit percentages in every region apart from London compared with the same time last year. London was the only region where there were more homes available to rent than in February 2020. The South West and Wales saw the largest declines, with 48% fewer homes available to rent in February than the same time last year.
The urban-rural divide which first emerged at the start of the pandemic has continued to deepen. There were 16% more homes available to rent in cities across Great Britain in February 2021 than at the same time last year, while towns and country locations recorded falls of 28% and 52% respectively. This divide was also evident in would-be tenant numbers which remained flat in the countryside, while dropping 10% in cities.
The lack of rental homes on the market has meant that so far this year half (50%) of landlords letting a property were able to secure a higher rent than they had previously achieved. This is the highest proportion since 2016, with an average increase of £60 per month. In line with weak rental growth in the capital, fewer London landlords (37%) were able to secure higher rents - marking the lowest proportion recorded in any region. In contrast, 62% of landlords in the South West were able to achieve higher rents on their properties.
However, there are signs that this stock shortage could be bottoming out. Over the last five months, and in an effort to beat the original stamp duty deadline of the end of March, landlord purchases started to rise, which will add to stock levels when these homes complete. Meanwhile the government announced a new Mortgage Guarantee Scheme in the Budget which is aimed at helping would-be buyers with small deposits, many of whom are currently renting. Both factors, alongside the ending of the eviction ban in April, mean rental stock levels may have bottomed out.