Compared to the last three years, the number of properties appearing for rent has increased by 42%.
The analysis, which offers an insight into the UK housing market to enable financial service providers to understand how consumers' financial needs are changing, revealed the number of properties coming to market for sale saw a 7% growth in the same period, and 10% increase in the last three years.
The increase in properties for sale across the UK continued to be led by homes valued at over £500,000 - up 13% in Q3 2013 year on year – with every region except the North East seeing an increase in this price band. The majority of these properties were in London and the South East (33% and 20% of all high end homes listed for sale in the UK). The biggest year-on-year increase came from the West Midlands which saw the number of homes priced at £500,000 or more increase by 24% from Q3 2012 to Q3 2013.
The number of more affordable homes for sale (those priced at less than £100,000) increased at a slower rate – up 7% during the same period.
Scotland was the only area to buck the nationwide rental trend, witnessing a decline in the number of properties coming on to the rental market over the last year. It did, however, see the number of ‘for sale’ properties increase the most – up 16% – and was one of the cheapest places to buy a home in the UK, with the second largest number of properties for sale under £100,000.
Experian’s analysis of property data using its Mosaic people classification revealed that during Q3 2013 (in comparison to Q3 2012), the largest increase in properties for sale was in neighbourhoods populated mainly by Upper Floor Living (up 16%) - young, mostly single people on limited incomes, renting small flats. The increase was driven by properties worth over £500,000 (up 59%), highlighting investment opportunities for landlords to buy large properties and rent them out to these individuals.
These neighbourhoods also saw among the biggest increases in more affordable homes (under £100,000). With the introduction of the Government’s new ‘Help to Buy' scheme, this highlights a greater choice of properties for this Mosaic group, whether they are considering buying or renting.
Neighbourhoods populated by the Professional Rewards and Small Town Diversity groups - injected the most fluidity into the property market. Professional Rewards are people who hold senior positions at work, have significant equity in their homes and are usually married with children. They were responsible for 11% of the total number of homes ‘for sale’ in Q3 2013, mainly driving the market for homes falling into the £250,000-£500,000 price band.
Small Town Diversity is a more traditional, mostly mature generation with lower incomes than the national average, living in small towns. They accounted for 11% of all homes for sale, but dominated the £100,000 to £250,000 price band.
Jonathan Westley, Managing Director of Consumer Information Services at Experian UK & Ireland, comments:
“Significant growth in the rental market could be a sign of the on-going struggle to get onto the home ownership ladder, but it is also consistent with the pickup in ‘buy-to-let’ activity over the past year. With that in mind, the continuing increase of properties for sale at the top end of the market may be driven by interest from both buy-to-let investors, as well as foreign investors.
“Our analysis suggests greater choice for first time buyers, so it will be interesting to see what our data reveals in the coming months as the Government’s ‘Help to Buy’ scheme gets going. As we await the impact on the property market, this insight is vital for lenders wanting to understand better the pressures or changes impacting their customers.”
