The latest report from Zero Deposit reveals a -7.3% drop in tenant demand for rental properties across England between Q3 and Q4 2024. While the figures show an annual decline of -2.6%, experts attribute this downturn to seasonal factors rather than a significant easing of the rental market crisis.
Seasonal trends and regional highlights
The national rental demand for England stood at 27.7% during the final quarter of 2024, a decrease both quarterly and annually. However, not all areas experienced a slump. Four counties defied the trend, with Somerset leading the way, recording a +3.2% increase in rental demand. Cornwall (+2.8%), North Yorkshire (+1.4%), and Warwickshire (+1.1%) also reported modest gains.
Conversely, Leicestershire experienced the sharpest quarterly decline at -15%, followed by the Isle of Wight (-12.1%), West Midlands County (-11.9%), Devon (-11.6%), and Buckinghamshire (-11.5%).
Despite these variations, Somerset emerged as England’s hottest rental market, with 50.8% of its rental stock already let during Q4. Other strong performers included West Sussex (47.3%), Suffolk (43%), and Bedfordshire (42.1%), where demand remained robust even during the quieter months.
Supply challenges persist
Sam Reynolds, CEO of Zero Deposit, highlighted the ongoing imbalance between tenant demand and rental supply:
“A reduction in rental demand during the final quarter of last year may suggest that the current rental crisis is easing, but this is far from the reality. The market continues to suffer from a severe imbalance when it comes to the demand seen for rental properties versus the supply of stock available across the market.”
Reynolds also pointed to the role of seasonal trends in the decline, with many tenants postponing moves during the festive season:
“In the run-up to Christmas, many tenants will have already made their move, and those who haven’t are more likely to put their plans on hold until the dust has settled on the festive period.”
Despite the Q4 dip, Reynolds is optimistic about rental demand bouncing back as 2025 unfolds: “Now that a new year is underway, we expect demand will once again start to climb as tenants look to make their move.”
