The squeeze on mortgage lending, renters’ reassessment of lifestyle priorities and students returning to university have all prompted demand for rented property to rise 20% year-on-year across most UK cities.
This is pushing average rents up by 1.7% to £744 a month, while supply into the rental market is flat, according to Zoopla’s quarterly Rental Market Report.
However, these increases in rental prices are not being seen across the board.
Manchester and Birmingham’s average rents have dropped by 0.1% and 0.5% respectively as they, like other cities, feel the impact of office workers continuing to work from home.
Despite average rental prices falling overall by 5.2% in London to £1,596, the data reveals that most Londoners aren’t desperate to escape the capital – in fact, the proportion looking to stay in the city has risen compared with last year.
Gráinne Gilmore (pictured), Zoopla’s head of research, says that for most of the UK, the demand/supply gap is underpinning moderate levels of rental growth.
“At the same time however, muted earnings growth will start to limit the headroom for rental growth in some markets.”
She adds: “The search for additional space, both indoor and outdoor, within the rental sector is also set to continue as the country goes through additional periods of lockdown.”
Zoopla also says renters’ wish lists have begun mirroring buyers’, as with renters looking for ‘gardens, parking, garages, balconies and pets’.
And as they yearn for outdoor space and the freedom to cope with lockdown, its finds evidence that this is speeding up the market for rented houses more quickly than for rented flats; the average time to rent a house is now 16 days, compared with 18 days for a flat.