Rents outside London rise at fastest rate for 13 years
The UK rental market is roaring ahead, with properties letting almost a week faster than in 2020, our research shows.
Rents outside London are rising at their fastest rate since 2008 as people return to city centres.
The typical price of renting a home in the UK, excluding the capital, now stands at £790 a month, costing tenants an additional £456 a year, according to our latest Rental Market Report.
The steep increase has been driven by renters returning to cities. But the surge in tenant demand has not been met by an increase in the number of homes to rent, forcing rents higher.
Gráinne Gilmore, head of research at Zoopla, said: "There has been a sharp rise in demand for rental properties in recent months, especially in central city markets, signalling the return of city life as offices and other leisure and cultural venues continue to open up more fully."
Rents across the UK, excluding London, have risen by 5% in the last year, the highest level since our index began in 2008 and more than double the 2.2% rise recorded in January.
Despite the rise, these places remain some of the most affordable in which to be a tenant. A single earner has to spend an average of 21% of their income on rent, compared with a UK average of 32%.
At the other end of the scale, rents in London have dropped by 3.8% year-on-year.
Even so, the rate at which rents in the capital are falling is showing signs of bottoming out, as tenants return to the city.
Across the whole of the UK, including the capital, the average rent stands at £943 a month, 2.1% more than a year earlier.
But with average earnings rising faster than rents, rental affordability is holding steady for tenants who are employed.
Kate Eales, head of regional residential agency at Strutt & Parker, said:
"Rents are recording healthy growth in cities, but in the most desirable areas, there’s evidence of growth up to 25%. We recently let a home in the Cotswolds for £3,750 a month when it was previously let out at £2,200 and another was let for £5,500, up from £4,100."
Tenant demand is soaring. It was nearly 80% higher in August than average levels between 2017 and 2019.
It’s being driven by a resurgence in city centre life, with people being drawn back as offices, bars, restaurants and other leisure facilities reopen.
There are also seasonal factors at play, such as university students looking for accommodation ahead of the new academic year, graduates starting jobs and families moving before the school term starts.
The bounce back has been particularly marked in London, leading to rents in the 12 inner boroughs rising by an average of 2.3% between May and July.
It’s reversing the decline seen during the earlier stages of the pandemic, when renters moved back in with families or relocated to more rural areas.
While demand so far this year has increased by 19%, the level of rental homes available has fallen by 13%.
This mismatch is not only forcing rents up, it is also leading to the rental market moving at its fastest pace since 2016.
The average time between marketing a property for rent and agreeing a tenancy is now just 15 days, compared with 20 in July last year.
"The recovery in the rental market has, in many ways, mirrored the boom in the sales market, with people looking for homes that accommodate a different set of needs shaped by their lockdown experience.
"Lack of stock and high demand are inevitably driving price growth. This stock depletion is a result in part of many accidental landlords having now sold their properties - benefiting from the soaring demand in the sales market."
If you are a landlord with a property to rent, the current surge in tenant demand is good news.
It not only means you are likely to be able to find a tenant quickly, but you are also likely to be able to achieve the rent you want.
It is worth noting the swing back to city life, compared with the earlier stages of the pandemic when people were looking for homes in rural locations and ones with outdoor space.
With demand rising and the level of homes to rent falling, you can expect to face significant competition from other tenants to secure a home.
The imbalance is also pushing rents higher, so you may have to pay more than you did a year ago.
Use our advanced search tool to get an idea of what is out there within your price range.
And stay ahead of the pack by registering with us to receive alerts when a property that meets your criteria comes onto the market.
If you are finding it hard to find somewhere, consider looking outside of town and city centres.
The high number of people looking for a home to rent during August will ease off in line with seasonal trends.
But demand is expected to remain high in the coming months as the return to city life continues.
Gilmore explained: "As ever, much will be dependent on the extent to which the current rules around Covid-19 continue as they are.
"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."