Yahoo Finance UK rents hit decade-high as London lags
UK rents outside London are soaring, with tenants rushing back to cities as lockdown restrictions ease and many are expected to come back into the office, new data showed.
Zoopla’s latest report shows that the rental market has “revved up” amidst a sharp rise in demand for city living, driving the highest rate of growth outside London for over a decade.
Soaring demand in major cities and limited supply has meant rents are up 5% year-on-year across the country excluding London.
Monthly rents are averaging £790 ($1,087), up from £752 a year ago. This adds up to renters paying on average £456 more per year.
Rental growth in some cities and towns rose even further. In Wigan and Mansfield it reached double figures, at 10.5% and 10% respectively.
Hastings, Blackburn, Barnsley, and Norwich are registering growth of 9.4% or more.
"What unites all of these locations is that they remain some of the most affordable places to rent, with the proportion of income needed for a single earner to pay monthly rent below the UK average of 32%, falling to 21% in Wigan," the report found.
Manchester, Reading and Leeds have moved from negative to positive rental growth territory.
Rental declines in London have bottomed out, Zoopla said, as demand rebuilds amid the ending of lockdown and the reopening of offices and amenities.
While annual rental declines reached -9.8% in London in February, they recovered to -3.8% in July, signalling an ongoing return to stability.
Demand for rental properties rose by 33% in August compared to the same period last year, and is 79% above the 2017 to 2019 average.
Current activity levels are unusually high, precipitated by students and returning city-dwellers. In August, the stock of property available to rent was around a third below where it would be typically at this time of year.
Read more: UK regions with most rental growth
The surge in renters has eroded supply, which was already declining, and competition is fierce for rental properties.
Rental demand will remain higher than usual in the coming months, the report said, in line with seasonal trends, and the lower levels of stock will support stronger rental growth through the rest of the year.
“As ever, much will be dependent on the extent to which the current rules around COVID continue as they are,” said Gráinne Gilmore, head of research at Zoopla.
“But given no deviation from the current landscape, the demand for rental property, coupled with lower levels of supply, will continue to put upward pressure on rents. In London, this will translate into rental growth returning to positive territory late 2021 or early 2022.”
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