Exploring the Changing Demand in the Rental Market

Rising Rental Demand for Homes Outside of Cities

Based on data that Rightmove found, most individuals looking for a place to rent usually start their search for their next home in the local area where they previously lived. However, throughout 2021, Righmove’s data revealed a trend that saw more people in the sales and rental markets moving further afield from cities. With the hopes of finding a property in a more coastal or countryside location. According to research completed by Zoopla, in spring 2022, 44% of city livers wanted to move to a more suburban area.

In the rental market, tenants have continued to move away from cities and look for houses further afield than they previously did. A large factor for this is the rise in Working from home, the traditional idea of having to buy a house in or near a city for job opportunities has become less true. Working from home makes longer commutes to the office less of a burden. Allowing renters to look further for where to live and allowing them to find better value for money.

In London in 2024, 34% of renters are searching for properties outside the city, compared to 30% in 2021. In Leeds, 52% of people renting are searching for houses outside the city, compared to 46% in 2021.

Tenants Looking for Larger Living Spaces

Office for National Statistics data revealed the number of people working from home in the UK more than doubled between the end of 2019 and the start of 2022, rising from 4.7 million to 9.9 million. Due to the large rise in hybrid working over the last four years, tenants are now looking for properties offering additional living space to accommodate a place to work at home. 

Demand quickly advanced for properties with room for an office, or a section of living space that could be transformed for working. This includes a rise in demand for additional workspaces in short-term rental properties, adapting to the needs of working professionals. Many off-plan apartment blocks have started to introduce conference and meeting rooms to the developments, which are sure to see high demand from hybrid workers.

Many tenants also look for properties with features such as a fast and reliable internet connection and outdoor space if they moving there and working from home. Good connectivity and a range of amenities are also desirable features that make a property attractive. Properties with these features available are very likely to experience significant price growth.

A Rising Rental Demand for ‘Premium Properties’

Although many of these factors have long been standard in rental properties and remain key priorities for renters, there is a rising demand for more premium features. Many of these features were once harder to find in rental homes, however, some developers are now incorporating these to meet the changing demand. 

Many newly built apartments, for example, are now offering upgraded amenities such as private terraces, shared gardens, meeting rooms, and energy-efficient appliances, all designed to enhance residents’ experiences.

Investors who ensure these features are present in their properties can appeal to a wider range of tenants. Furthermore, tenants are also likely to stay for longer within a property with luxury features, reducing the risk of void periods. Therefore, investors can boost rental income and secure a higher return on their buy-to-let investments.