UK Rental Market Update: 2022 Predictions

Demand returns to

City Centres

As we edge closer to Christmas and the New Year, traditionally a slower market period, activity is remaining well above normal. Given the high levels of demand and exchanges over Q3 2021, this does not come as a surprise. In particular, the rental market is performing exceptionally well. Rental growth has reached a 13-year high, with the UK’s major cities being the most popular destinations for tenants.

The report also revealed that the highest levels of rental growth correlate with the more affordable areas of the UK. This is great news for investors, as the most affordable locations will allow for much higher levels of capital growth. With rental growth and demand equally as high, buy-to-let investors will be able to access the highest returns and best rental yields. 

CityRise Verdict

Going into 2022, we predict rental demand to remain strong. We expect Q4 to be a busy period, with demand levels much higher than usual. This will be exacerbated by supply levels (or lack thereof). Rental stock will remain sparse going into the new year, due to lower levels of investment into the sector. Consequently, this will drive up demand. For any investors, 2022 is looking like it will be a promising year for the rental market.

In terms of location breakdown, the more affordable areas of the UK seem to be performing the best. This is great news for investors, as more affordable areas will allow for higher capital growth levels. Birmingham, Liverpool, Manchester and Leeds seem to be the cities experiencing the most impressive rental growth – especially in city centres. Therefore, we expect these cities to be the key players in the rental market in 2022.