As the UK housing market reaching a near-boiling point of high demand, it’s not just home buyers feeling the heat. Record tenant demand and properties being let out quicker than ever before has led to the average asking rent of a home outside London surpassing £1,000 per calendar month for the first time.
With recent property advice for buyers including holding off buying a house altogether for the time being, renters in city centres are finding themselves in a difficult position of having to allocate unprecedented sums to pay for their homes. Rightmove’s Quarterly Rental Trends Tracker, based on over 470,000 properties, reveals that the number of prospective tenants contacting agents about properties for rent is currently 10 per cent higher than in July 2020 across Great Britain. This is despite last year benefitting from pent-up tenant demand when the rental market re-opened in mid-May in England.
London and Edinburgh are the only cities with rents going down
The average asking rent is now higher than this time last year in every region except London. In the capital, rents are down 3.1 per cent from last year, with most rent increases recorded in Greater London suburbs rather than the city centre. Edinburgh also has experienced rent declines of four per cent year-on-year, a boon to renters in this very expensive city.
It’s in regional city centres that the rents are really creeping up. In Nottingham city centre, asking rents are up annually by 6.8 per cent, and the next best performing city centre is Liverpool, where rents are up by 3.8 per cent. It’s not just the big cities that are seeing big increases, with city suburbs, commuter towns and coastal locations all seeing rent hikes. Rochdale, Folkestone and Farnham have all seen asking rents jump by more than a shocking 25 per cent.
The reasons behind the rent hikes
The time it is taking for a letting agent to find a tenant for a property is at a record low of 21 days nationally, measured from the date they are first marketed on Rightmove until the property is marked as let agreed. This pace has led to a drop in available stock of 36 per cent across Great Britain. Rightmove’s Director of Property Data Tim Bannister said: ‘At the start of this year the impact that tenants leaving cities had on rents was clear to see, but with restrictions continuing to lift we’re seeing signs of the city centre comeback. As businesses settle into a more structured balance between home and office time, we expect this to continue for the rest of the year.’
The rising rents are at least in part due to many younger people rethinking where they want to live after spending 2020 with family: ‘Tenants across Britain are being faced with low stock and record rents in many areas, likely fuelled by some tenants signing longer leases last year and also perhaps by a rush of people who chose to move back in with family last year, who are now making plans to rent again and in many cases starting to think about their new daily commute. We’re also starting to see signs of London rents creeping up again, but they’re still lower than two years ago so it will take time.’
If your situation permits it, it may be prudent to stay with the parents for another year. If not, then looking for a flat outside town centres may help.