Fewer potential tenants are registering with lettings agencies. 

At least, that’s the experience of estate agency Hamptons who say they definitely saw the market weakening last month. Agents point to a 17% drop in the number of potential tenants coming to them. At the same time, 1.5 times as many would-be tenants as first-time buyers are registering – compared to 3 times as many two years ago when mortgage costs peaked.

“Lower mortgage rates are changing the arithmetic for tenants who are thinking about buying,” said Aneisha Beveridge of Hamptons. “Landlords rolling off short-term fixed-rate mortgages are now seeing their monthly payments fall, reducing the need to pass on further costs to tenants…This has boosted first-time buyer numbers and reduced demand in the rental sector.”

Renters’ Rights Bill expected to pass in Summer

It’s not all doom and gloom for landlords though. That’s because the introduction of the Renters’ Rights Bill, which is expected to pass this summer, will encourage more people to rent. That’s because it will abolish section 21 evictions and make it more likely for renters to have a pet in their rented property.

The number of potential renters is also far higher than properties available, meaning rents are expected to continue to rise higher than inflation. Figures from the ONS showed a jump in the UK monthly private rent rate of 7% over the past three months to May, for instance. That brought the average UK rent to £1,339.

Sellers having a tougher time of it

Meanwhile, sellers are having to drop asking prices as the number of properties for sale increases. Rightmove has seen a jump of 11% more properties coming to market than at the same time last year, while buyer demand has only increased by 3%.

Locations where asking prices fell most this month were in London (by 1%), the south-west (1.6%) and the south-east (0.9%). Fittingly, these were also the areas where properties for sale increased most.