UK rental growth outside London has hit a 4 year high, as average rents across the UK rose by 1% in the three months to the end of March, taking annual rental growth to +3%, marking the highest level of rental growth in 4.5 years, amid a build in rental demands. Excluding the capital, the average monthly rent is £853, up 6.2%.
Rental demand was 59% higher in April than in a typical April in the more normal markets between 2017 to 2019. In the first quarter of this year, demand for rental property outside the capital was 32% higher than in the same period last year.
A shortage in supply of properties available to rent is struggling to keep up with the growing demand. This is down to a number of reasons such as affordability constraints and reluctance to make larger investment decisions during the pandemic. Also, investment into the private rental market, mostly made up of individual landlords, has not regained the levels seen in 2015 before the additional 3% stamp duty was introduced for investors.
Although rental demand is building in the city centres as lockdown eases and offices start to reopen, new instructions were 9% lower in the first three months of 2021 compared to 2020 (TwentyCi).
Across the UK as a whole, annual growth is currently 2.9%. This is on par with projections for growth over the next year (RICS).
If you would like some more information on the current state of the rental market in Leeds, please feel free to pop in for a coffee and a chat, now that restrictions are easing. Or, drop Joy Gray a message here as she would love to talk to you about anything property.
Source: Zoopla, Dataloft, HomeLet, April 2020
