Landlords looking to let out rental properties across much of the UK may have noticed a surge of interest in recent months. But a lot will depend on what you’re offering and where…
The UK rental market continues to perform strongly, a new report from Zoopla has confirmed. However, it is currently still very much a “two-speed” market, with London falling behind as the other parts of the country see rising demand and growth in the sector.
Zoopla‘s data reveals that, on average, demand from tenants in the private rented sector (PRS) in September was around 20% higher than the previous year. This is slightly lower than the huge surge seen at the start of summer, but is still a sign that rental homes are hot property right now.
One reason for the growing number of prospective tenants lies with the mortgage market. Some first-time buyers are finding it difficult to source a mortgage as lenders remain cautious. Although rates are low, product numbers, particularly at higher loan-to-values, are also low. For others, job uncertainty means they are likely to continue renting for longer.
Why people are moving…
The imbalance between supply and demand is a key factor in the current dynamics, says the report. This is something that continues to change. For example, students returning to universities will push demand and therefore prices up. On the flip side, property investment has also been on the rise, which will see supply increase.
However, some of the changes seen recently are as a result of people’s shifting priorities. It is well-documented that many homeowners are looking for properties with more space both inside and out. For some, location needs have changed, too, due to the increase in working from home.
The same has happened in many cases for renters. Although there may not be an increase in the ‘London exodus’ as such, markets in more suburban areas have become more popular.
The report adds: “The data shows that most Londoners are looking for rental property within the capital, so the idea of a large-scale move from London is probably an overstatement.”
Time to rent is shrinking
The average time it takes to rent a property has also fallen across the board, which is another indication of growing demand. According to Zoopla, the average time it takes to rent out a house is now just 16 days. This is down from a 20-day average last year. For flats, the figure has also fallen from 20 down to 18 days.
Looking at all property types, the UK average time to rent is 17 days. The fastest area currently is the south-west, where it takes just 16 days on average from advertising a property to agreeing a let. After this, the north-west, East Midlands and London all see properties snapped up within 17 days.
Rental prices are rising everywhere but London
In terms of rental values, the north-east has seen the biggest rise over the past year, looking at England alone. Here, rents have gone up by 3.2% between September 2019 and September 2020, to an average £520pcm. The south-west follows with a 2.7% rise, then Yorkshire and the Humber with 2.3%.
Rents in London, though, show a very different trend. There, they fell sharply year-on-year by -5.2% overall.
The report states: “The central London rental market is being affected by the changes in working trends, with rental property typically used by workers staying in town or part of the week coming back to the market as many continue to work from elsewhere.”
“The muted tourism during summer and autumn mean that any short-let landlords who had not switched into a long-let option may be choosing to do this now.”
