Marketing No Comments

Acute Demand Pushes Rental Growth To New High

‘Acute rental demand’ over the three months to September 2021 has pushed UK rental growth to its highest level since 2008, Zoopla has reported.

And the upward pressure is set to continue, said the property portal. Demand is continuing to outstrip supply which is running at 43 per cent below the five-year average .

On average UK rents are now 4.6 per cent higher than a year ago – 6 per cent if London is excluded from the calculation – and 3 per cent up in the last quarter alone.

Even London rents are showing signs of recovery. After 15 months of consecutive falls, London’s rents increased by 4.7 per cent between June and September.

Get in touch with Mortgage Broker UK today to discuss your residential and Buy to Let Mortgage requirements

‘The market is being shaped by an ongoing supply and demand imbalance, with demand continuing to outstrip supply’, said Zoopla.

‘The imbalance has been compounded by both long-term structural issues such as landlord divestment following the 3 per cent stamp duty levy introduced in 2016, and more the immediate post-lockdown demand, which collectively have eroded available supply’.

Rental growth is also explained in part by tenant demand moving up the price bands. This reflects the continuing search for space, which has not only characterised the sales market, but the rental market, too, said Zoopla.

The regions registering the highest levels of rental growth are among those that are the most affordable when compared to the UK average, and as such, there has been more headroom for rents to increase.

‘Rental growth is close to, or at, a 10-year high across most UK regions – except for in London and Scotland. Rents are up most in the South West, 9 per cent year on year, followed by Wales, 7.7 per cent, and the East Midlands, (6.9 per cent .

Discover our Buy to Let Mortgage Broker services.

‘In many of the UK’s largest cities, annual rental growth is running well ahead of the five-year average rate of growth. Bristol leads with 8.4 per cent growth in the year to September, followed by Nottingham at 8.3 per cent, and Glasgow at 7.2 per cent.

Rental demand in the central zones of Manchester, Edinburgh and Leeds has at least doubled over Q3 compared to Q1, and in Birmingham demand has increased by 60% – buoyed by the return of office workers and students, and the lure of city life.

‘The swing back of demand into city centres, including London, has underpinned another rise in rents in the third quarter, especially as the supply of rental property remains tight’, said Zoopla head of research Gráinne Gilmore.

‘Households looking for the flexibility of rental accommodation, especially students and city workers, are back in the market after consecutive lockdowns affected demand levels in major cities. Meanwhile, just as in the sales market, there is still a cohort of renters looking for properties offering more space, or a more rural or coastal location’.

Source: Landlord Knowledge

Discover our Mortgage Broker services.

Marketing No Comments

Rental growth reaches a record 8.0% outside London

Rental growth outside London has hit 8.0%, the highest figure ever recorded by the Hamptons monthly letting index.

The cost of renting rose by 10.6% in the South East, the first time the region has entered into double-digit growth.

Rental growth nationally has been fuelled by a lack of stock – 300,000 fewer properties have come onto the rental market since the onset of the pandemic (March 2020 to February 2021), nearly a fifth less than during the preceding 12 months.

To find out more about how we can assist you with your Mortgage requirements, please click here to get in touch

Aneisha Beveridge, head of research at Hamptons, said: “This year we’ve seen a sharp decline in the number of rental homes coming onto the market. Would-be tenants are now faced with significantly less choice, which in turn is pushing up rents.

“And with many landlords having multiple offers on the table, half of investors have been able to increase the rent they charge.

“Rental stock levels have also been hit with the onset of the pandemic causing investors to hold back. This has been compounded by emergency legislation which saw landlords having to extend a tenant’s notice period to a minimum of six months, reducing turnover further.

Read about the UK Housing Market via our Specialist Residential & Buy to Let Division

“At the same time, many renters who were looking to buy had to put their plans on ice and continue renting, as banks sought larger deposits for house purchases.”

Rents in inner London, where demand has been decimated by the pandemic, have fallen by 17.7% to £2,185.

However in Outer London rents grew 5.3% annually, suggesting expensive areas where rents have fallen the most.

Beveridge added: “Over the last five months, and in an effort to beat the original stamp duty deadline of the end of March, landlord purchases started to rise, which will add to stock levels when these homes complete.

“Meanwhile the government announced a new Mortgage Guarantee Scheme in the Budget which is aimed at helping would-be buyers with small deposits, many of whom are currently renting. Both factors, alongside the ending of the eviction ban in April, mean rental stock levels may have bottomed out.”

BY RYAN BEMBRIDGE

Source: Property Wire

Discover our Mortgage Broker services.