How much have rentals bounced back in your area?
Rental growth outside London has hit a 13-year high*, as the UK rental market continues to surge.
Our latest Rental Market Report shows that city centres are seeing the biggest growth, buoyed by the reopening of offices, leisure and cultural venues. As well as the start of the new academic year in key student locations.
The UK rental market is picking up speed
Rental growth outside of the capital was up 5% in the 12 months to the end of July 2021, compared with 2.2% in January 2021. Signalling the biggest increase since Zoopla’s index began in 2008.
And as tenants continue to re-evaluate their lifestyles on the back of the pandemic, the largest rental growth has been seen outside of London, hitting ten-year highs in:
- The South West (+7.6%)
- The East Midlands (+6.8%)
- The North East (+6.5%)
- Wales (+6.4%)
- Yorkshire & the Humber (+4.9%)
With some of the most affordable locations, such as Wigan and Mansfield, reaching double figures at 10.5% and 10% respectively.
The average time between listing a property and agreeing a rental tenancy is also speeding up, falling to a five-year low of just 15 days. Meaning the average time to let a property is five days quicker than it was 12 months ago.
What’s happening with rentals in your region?
To understand what’s happening in your agency’s area, click on the interactive map to see the regional changes in rental growth, average time to rent, average rental income, and affordability:
And what about larger cities?
Although some of the largest growth has been seen in regional towns, the surge in demand has also pushed rental growth back into positive territory in some of the UK’s largest cities.
Marking the ‘swing back’ of the pendulum as renters return to city life, particularly in Manchester, Birmingham, Leeds and Edinburgh.
The same trend is also reflected in London, with rental decline slowing as demand picks up. With rental growth increasing to -3.8% in July, from -9.8% in February.
What does this spike in rental growth mean for letting agents?
A busy rental market is always positive for letting agents, but it’s important to consider what impact this pick-up is having on stock levels.
Our research shows that the total stock of homes available to rent in August was around 30% lower, compared to the same period last year.
And it’s not just the increased demand that’s impacting stocks.
A decline in investment in the buy-to-let sector since the introduction of the additional 3% stamp duty in 2016, is also having a knock-on effect. Particularly as the government’s stamp duty tax relief has drawn to a complete close.
As a result, the focus for letting agents will now be on attracting new properties, as demand is likely to remain higher than usual in the coming months.
A positive outlook for Q4 and beyond
Despite the stock constraints, the outlook for Q4 and into 2022 is looking good.
Demand remains strong as cities return to some sort of normality and upwards pressure on rents should continue. With the London rental market expected to return to positive territory in late 2021 or early 2022.
And those agents in a good position to secure new stock will be well placed to profit from quick rentals and higher rents.
Looking to capitalise on a buoyant rental market? Book a no-obligation demo to see how Alto can help manage demand and streamline communications.
*Data taken from the Zoopla Rental Market Report July 2021 (published September 2021)