The UK rental growth has skyrocketed since COVID, with prices currently hitting a 13 year high outside London! This is our seasonal market report based on data up to September 2021.
‘UK rental growth outside London hits 13 year high’
Average rental prices across the UK excluding London rose by 5% from July 2020 to July 2021. This is the biggest increase since Zoopla’s index began in 2008, and is due to a resurgence in demand as the economy continues to open up following the pandemic. The average monthly rent outside London now sits at £790, which is £38 more than last year where the average price sat at £752.
Demand is not matching supply
Rental demand is up 19% compared to last year, while the stock of rental property is down 13%. The total stock of homes available to rent across the UK is 30% lower than the normal levels for this time of year. This demand is due to a combination of a lower supply of rentals and a decline in investment in the buy-to-let sector since the introduction of the additional 3% stamp duty in 2016. The sector of build-to-let homes however, which is built and operated by large institutional investors, is on a strong upward trajectory. This segment of the market is still small, and is not enough to fill the gap of landlords who have decided to sell their rental properties or change them to holiday lets. As a result of this, rental supply is expected to remain limited across the UK.
Market moving at a record speed
The average time to rent has also fallen to a five-year low. The average time between listing a rental property and agreeing a rental tenancy is now 15 days (down from more than 20 days in July last year). The market is moving fastest in some coastal locations such as Bournemouth and Hastings, where the rental demand has remained high over the last 12 months and the average let is agreed in just over a week.
Predictions for the coming months
The high levels of rental demand seen during August should recede slightly to fall in line with seasonal trends, but overall demand for rental property is likely to remain higher than usual in the coming months. Assuming the rules surrounding COVID remain the same, the demand for rental property combined with lower levels of supply will continue to put upwards pressure on rents.
Data obtained from Hometrack UK.