"The 12 counties with the strongest demand are all located in the south, with Nottingham’s entry at number 13 being the first showing for any county in the midlands or north of England"
- Sam Reynolds - Zero Deposit
Zero Deposit analysed rental demand across each county in England based on the number of available rental properties that have already seen a let agreed as a proportion of the total rental stock available.
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The latest index by Zero Deposit shows that rental demand across England sat at 35.1% during the third quarter of this year, meaning that more than a third of all rental properties listed on the market had found a tenant.
This marks a quarterly increase of +1.7% as well as a +3.3% increase since the start of 2024.
Quarterly movement
West Midlands County recorded the largest quarterly increase of all English counties, with rental demand climbing by +5.6% between Q2 and Q3 2024.
The second-largest tenant demand increase was recorded in Leicestershire (+5.2%), with West Yorkshire (+4.5%), Greater London (+4.1%), and Devon (+4%) completing the top five for quarterly growth.
England’s hottest and coldest rental markets
England’s hottest rental market right now is West Sussex where tenant demand of 55% is highest across all counties for Q3 2024.
In Wiltshire, 50.1% of all rental properties have secured tenants, while demand is also strong in Hertfordshire (48.4%), Somerset (47.6%), and Cambridgeshire (47.4%)
However, rental demand in some counties is lagging severely behind.
In Nottinghamshire, just 20.8% of all rental properties have been successfully let, while demand is also particularly low in East Riding of Yorkshire (25.3%) and the City of London (26.2%).
Sam Reynolds, CEO of Zero Deposit commented: “We’re continuing to see good rental demand in England, especially when looking at the rate of growth since the beginning of 2024. It’s important to note, however, that the most sought-after markets remain very much in the southern counties of England.
"In fact, the 12 counties with the strongest demand are all located in the south, with Nottingham’s entry at number 13 being the first showing for any county in the midlands or north of England.
"While things are looking quite good for England’s rental market, there are two things on the horizon that are sure to have a big impact on tenant demand.
"The first is the Renters Rights Bill which is designed to protect tenants and give them a more secure rental experience. This added tenant confidence could bring more people into the rental market. However, there is also the fact that the new bill makes it harder for landlords to remove tenants. This may act to reduce supply as more tenants stay put for longer periods of time, reducing market churn.
"Then we have the upcoming changes to Capital Gains Tax that are widely expected to be announced during the government’s Autumn Budget on 30th October.
"If Labour does what they’re expected to do and increases the tax payable on capital gains, it could deter landlords from the private rental sector. This will result in stock levels falling which inevitably leads to an increase in demand statistics. However, as demand increases, so too does price. So we could also see the rising cost of rent impacting the number of people who feel they can afford to rent with many instead choosing, for example, to continue living with other family members.
"On the other hand, by reducing the profitability of selling rental properties, reform to Capital Gains Tax could encourage landlords to stay in the market because the cost of exiting becomes too great. Either way, it’s going to be a fascinating 12 months for the nation’s rental sector with some of the most significant reform we’ve seen in decades.”
