Rents surge by 11% in UK housing sector, reports Rightmove
UK housing has proved to be a resilient market that flourished well during and after the pandemic. The demand for houses across the country was at a record-high level during the pandemic and so were the prices. However, now that the realty market is set on the path of recovery after the pandemic, it is observed that rents are also increasing at a record rate.
Asking rent across the UK – excluding London, has jumped by almost 11% making the country one of the most competitive rental markets ever.
According to Rightmove’s Quarterly Rental Trends Tracker, national asking rents – outside the capital have reached £1,088 per calendar month (pcm). Last year, the rent in the same areas was recorded at £982pcm. On a comparative scale, the annual growth in asking rents outside of London has exceeded over 10% for the first time.
When it comes to London, the Rightmove’s Quarterly Rental Trends Tracker indicates that the asking rents in London have reached £2,193 pcm, up from £1,919 last year. The rents have increased by 14.3% in a year, which is the largest annual rise of any region in the country.
Real estate experts at Copperstones denote the increase in rent in the UK with the disparity between the demand and supply of residential properties. Average rents are 15% higher than the same period two years ago, when the pandemic was not started. If we deeply analyse the data, we get to know that the tenant demand is up by 6% while the number of available rental properties is 50% lower than this time a year ago.
In comparison to the same duration last year, we found out that the number of available houses in London had increased by 19%, indicating that the city had momentarily fallen out of favour with tenants. When compared to the more average 2019 market, demand is up 81 per cent and available rental units are down 47 per cent in London.
Rightmove’s director of property data, Tim Bannister, said tenants are now faced with the most competitive rental market ever recorded, with more than triple the number of prospective tenants as there are rental properties available.
“In the first three months of this year, we’ve seen tenant demand exceed the high levels set last year, which, when coupled with the fewer available homes for rent, has resulted in the most competitive rental market we’ve ever recorded,” Bannister noted.
The ongoing imbalance between demand and rental properties’ availability means that when the tenants look for a new place to move to, are experiencing the most competitive rental market in the country. More than triple the amount of tenants are enquiring about available rental properties in the market, meaning the landlords are likely to pick from multiple suitable tenants for their properties.
Despite the mismatch between the tenants enquiring for new properties and the availability of rental properties, there are a few positives about the UK housing market. For instance, the number of new rental properties in the market has increased by 5% in March compared to January 2022 and 16% compared to February 2022.
Asking rents have increased by more than 10% in nine regions across Great Britain compared to last year. This has led to an increase in the demand for areas on the outskirts of major cities that offer lower rents but still being within easy approach to work places in the developed cities.
“On the supply side, we’re hearing from agents and landlords that tenants are signing longer leases, which has prevented some of the stock that would normally come back onto the market from doing so. When it comes to demand, we’re still seeing the effects of the pandemic, whereby tenants are balancing what they need from a home and how close they need to live to work with where they can afford,” said Bannister.
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