Research: How to measure rental demand

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Before buying a property to rent out, or even choosing an area to invest in, it makes sense to investigate rental demand in an area.

When there is high demand (a landlords's market), the market is healthy and properties will let quickly. Conversely, when there is an excess of rental supply on the market and low demand, it's a renter's market and void periods will be longer.

PropertyData's Local Data tool can assess rental demand for you. Start by defining the area that you are interested in. You need to ensure that the area is large enough to have meaningful data, yet not so large that the data becomes less relevant.

Once you're satisfied with the area, click 'Generate data' and the PropertyData market analytics dashboard will appear after just a few seconds.

Navigate to the 'Activity' tab at the top, and then click onto the 'Rental market' subtab:

Let's break down what we're seeing. The data on the right is showing the number of properties for let, and statistics on how quickly properties are letting.

On the left, the 'gauge' shows the turnover figure per month – what % of the rental stock is rented each month. We categorise this as follows:

  • 40%+ – Landlord's market
  • 25-40% – Balanced market
  • <25% – Tenant's market

In the example we have shown here you can see that rental demand is high, and rental properties are moving quickly, and therefore we have labelled the area a Landlord's market.

If you want to find the areas with the highest rental demand, have a look at our Postcode Data, where you can add Rental turnover as a column or order by it.

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