UK Rental Market Growth Hits 13-Year High

Demand returns to city centres

In cities such as Birmingham, Leeds and Manchester, average rents have risen significantly in the last three months. This marks the ‘swing back’ of the pendulum. Renters are beginning to return to a city life similar to that of pre-COVID. During the beginning of lockdown, demand in city centres declined dramatically as tenants lost the desire to pay city centre prices without any of the amenities. Consequently, as offices, bars, restaurants, galleries, theatres, and other city centre attractions have reopened, rental demand has risen and pushed up rents.

London is the only city that has struggled to keep up with the other UK hotspots. Over the last 12 months, London rents sharply declined to the lowest levels in over a decade. Now, they have plateaued. The average rental change across London is -3.8%, compared to -9.8% in February this year.

Fast-moving market

Another sign that the rental market is picking up speed is the average time taken to rent. In July last year, the average time between listing a rental property and agreeing on a rental tenancy is only 15 days – a five-year low. This demonstrates how robust and active the market is. In certain coastal locations where demand has been exceptionally high over the last 12 months, the time taken for rent to be agreed is just over a week.

As mentioned, August is in line with seasonal trends. However, over the coming months, rental demand is likely to remain much higher than usual amid a move back to city centre life. Not to mention, the unpredictable nature of the pandemic means COVID rules could change at any moment. In which case, these predictions could change. However, if society remains as it is, the demand for rental property coupled with increasingly low levels of supply will continue to put upwards pressure on rents.