Property insights: Rents continue to rise nationwide
House price growth may be slowing, but rents look set to continue to increase. Property experts generally agree on growth estimates of around 4–5% annually.
Property website, Zoopla, reports that the average rents for new-lets have risen the most, by 11.1% in the last 12 months. Earnings have increased by 6.7%.
Demand for rental homes remains 10% higher than last year, driven by four key factors:
- the strength in the job market
- resulting high economic immigration
- a rapid increase in oversees university students
- a static supply of rental homes.
The other property website, Rightmove, points out that the first quarter of 2023 marked the 13th consecutive three-month period where asking rents on new properties to let had risen. This run stretches back to the end of 2019.
Rental rates nationwide
Zoopla’s Rental Index for March 2023 shows that:
- Manchester has the highest annual percentage increase in rents (14.4%), with an average of £970 per calendar month
- people pay twice as much to rent in London (on average £1,970) than in the North, Midlands, Wales, Scotland or Northern Ireland
- rents across the south are the most expensive compared to other regions, with the South East, South West and East of England having average monthly rents of over £1,000
- the North East of England is the most affordable place to rent, averaging just over £630 per month
- the cheapest major cities to rent are Aberdeen, Belfast, Newcastle, Sheffield and Liverpool, where average rents are below £800 a month.
Supply remains constrained
Rightmove reports that, while the gap between supply and demand of rental homes – or competition between tenants for available homes – has improved slightly compared to last year, there remains a significant imbalance. The number of tenants enquiring to move greatly outweighs the number of properties to rent.
Key insights from Rightmove’s most recent Rental Price Tracker include the following:
- competition between tenants has eased by 2% compared to last year, though it is still more than double (+173%) the level it was back in 2019
- the number of tenants enquiring to move is now 4% higher than this time last year, and 48% higher than 2019
- terraced houses have the biggest gap between supply and demand, with more than four times as many tenants asking about this type of property.
Gateway Today will return with more property news soon.
