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A Two-speed Rental Market Emerges
As the second lockdown takes effect, a ‘two-speed’ market emerges between London and the rest of the UK. This article explores the reasons for the divide in rental performance, across the regions. A new report released by Zoopla also confirms the continuous growth of the market.
The average UK rents outside of London have increased by 0.7%. This results in an annual growth rate of 1.7%.
In contrast to the strengthening market across the UK, figures from Q3 indicate a rental decline of -3.2% in London. This takes the annual decrease to -5.2% at the end of December. September marked the 7th consecutive month with declining rents, according to data from Hamptons International.
Average Rents in London Plunge
Changing work environments, have caused a decline in average rental prices in London. COVID19 continues to push renters and students out of the capital. This has increased the number of available rental properties in the city. With increased home-working and studying, commuter numbers have also plummeted. Additionally, with weaker tourism industry, landlords are forced to reduce prices.
Despite this, there is an increasing demand for property outside of London. Rental demand is 20% higher than the previous year and the market is looking optimistic.
Increased Demand for Rental Properties
The supply and demand imbalance suggests this is a great time to invest in the market. Property prices are on the rise due to an inflated demand for rented accommodation. Primarily because University students return to campus this Autumn. The North East has seen a surge in rental demands. This is evident as the region’s strongest rental growth stands at 3.2%. Marking a 54% increase in Q3, compared to previous years.
“Demand is still outstripping supply in many markets, underpinning rental growth. However, subdued earnings growth may start to limit further rises in rents in some markets.” – Gráinne Gilmore, Head of Research Zoopla. We predict aspiring homeowners will stay in the rental market for longer. Mortgage lenders are taking a cautious approach to offering loans. Job uncertainty and redundancies are also at an all time high. Leaving many to struggle with deposits and credit checks.
Time Taken to Rent a Property Drops
In 2019, the time taken to rent a house averaged 20 days. This year, it has been reduced to just 16 days! A clear indication of the growing demand for accommodation. You can see this trend across the board. Flats are also being snapped up quicker. On average it only takes 19 days from listing to accepting an offer. In comparison to 20 days last year.
In conclusion, this is great news for landlords. Properties are letting faster than ever and people are looking to rent long-term.
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