Tenant to rental property ratio forecast to ease by 2030, but stock availability still poses problem for sector

The latest research by Zero Deposit, the tenancy deposit alternative, has revealed that while the ratio of tenants to available rental properties is forecast to ease by 2030, there will still be over two tenants for every rental property available, highlighting the tough task facing those reliant on the rental sector to put a roof over their head.

Zero Deposit analysed historic market data on the number of private rental homes across England, as well as the number of private tenants, looking at the market balance between the two and how this ratio is forecast to change by 2030.

The research shows that in 2023, there were 4.939m private rental homes across England, whilst there were almost 10.815m private tenants, resulting in a ratio of 2.19 renters for every rental property.

This marked a year on year decline versus the ratio of 2.22 seen in 2022 and also sat below the pre-pandemic benchmark of 2.28 in 2019. It also sits far below the ratio of 2.56 seen in 1991 which was the highest of all historic years analysed by Zero Deposit.

The good news is that the research by Zero Deposit forecasts that the number of private tenants versus the availability of privately rented stock is set to ease further by 2030.

Zero Deposit forecasts that by 2030, the number of privately rented properties is set to grow by 9.5%, hitting just shy of 5.408m. At the same time, the number of PRS tenants is forecast to hit 11.146m, an increase of 3.1%.

As a result, Zero Deposit forecast that there will be 2.06 renters for every PRS property across England, a change that CEO Sam Reynolds says is a considerable improvement, but one that is unlikely to tip the scales in favour of renters.

Sam Reynolds, CEO of Zero Deposit commented:

"Despite the ratio of tenants to available properties easing last year, the rental sector remains a fiercely competitive place and the imbalance between demand and supply is the driving factor that has caused rental values to spiral in recent years.

PRS stock levels are expected to continue increasing over the coming years which should see the tenant to property ratio ease further and this could be boosted by Labour's pledge to deliver 1.5m new homes. However, the intended new stock that Labour plans to deliver is largely targeted at addressing the wider housing crisis and increasing supply for homeowners.

Whilst some of these homes may inevitably be purchased by landlords this increase is unlikely to address the sector's supply demand imbalance in a meaningful way and we estimated that there will still be more than two tenants for every PRS home despite the predicted increase in stock levels.

Therefore, it's never been more important to landlords and letting agents to offer tenants choice, particularly to ensure that landlords have access to the largest possible pool of tenants. Deposit alternatives are just one tool that makes their properties far more attractive, as it gives tenants the ability to make their move without being prevented by the initial high cost of a rental deposit."