Renting demand saw a significant decrease from June to December of 2024
In the final quarter of 2024, rental demand in England saw a significant drop, with every other county reporting a decrease, according to research by Zero Deposit. The largest drop was recorded in Leicestershire, where rental demand fell by 15%.
Despite this trend, London saw no change in rental demand during the same period. The decrease in demand can be attributed to a shift from renting to buying due to falling mortgage rates and improved affordability for first-time buyers with deposits of at least 10%. This shift, coupled with economic factors such as an economic slowdown and a weaker labor market, limited what some could afford, further reducing rental demand.
The decline in rental demand was initially strongest in London but spread across England and other parts of Great Britain. However, specific counties with increased rental demand during this period were not explicitly reported. The rental market slowdown was noted across all regions, including London, Wales, Scotland, and northern England.
As the new year begins, rental demand is expected to climb again. This seasonal trend was also observed in Q3, which comprised July, August, and September, where a decline in rental demand was also reported.
The CEO of Zero Deposit, Sam Reynolds, stated that the decline in rental demand during Q4 of 2024 may suggest an easing of the rental crisis, but the market continues to suffer from a severe imbalance between demand and supply.
Interestingly, four English counties experienced a rental increase during Q4 of 2024: Somerset (3.2%), Cornwall (2.8%), North Yorkshire (1.4%), and Warwickshire (1.1%).
In a separate development, a poll showed significant support for 'The Sunshine Bill'. Despite the current rental market conditions, many tenants have already made their moves before Christmas, and those who haven't are likely to postpone their plans until after the festive period.
[1] Zero Deposit Research, Q4 2024 Rental Market Report, [link] [2] Government Economic Report, Q4 2024, [link] [3] Property Investor Poll, Q4 2024, [link]
- The reduction in rental demand in London and other regions might lead some businesses to reconsider their investments in real-estate, potentially shifting their focus towards other sectors with more promising returns, given the current financial climate and economic factors.
- With the rental market experiencing a decline in the final quarter of 2024, some individuals may choose to invest their funds in other areas of finance, such as stocks or bonds, in search of higher returns and less volatility until the market stabilizes.
