Yesterday, Zoopla published their UK Rental Market Report based on the latest insights they have gathered.
According to the property portal website, average rents across the UK outside of London rose by over 5% in the last 12 months to the end of July, the biggest increase since they began their index in 2008.
Rents have been pushed up due to a resurgence in demand, especially in UK cities during the summer, as the economy starts to open again, and university students look for accommodation as the new academic year begins.
The average monthly rent outside London is now £790, which is up from £752 in July last year.
City life resuming
The research highlighted that the surge in demand has also pushed rental growth back into positive territory in some of the UK’s largest cities over the last four months. With offices, bars, restaurants, galleries, theatres, and other city centre attractions reopening, rental demand has risen and pushed up rents.
The rental market is highly seasonal, and this time of year is typically busy, as students start university, graduates start new jobs, families locate for the new school term and renters look for new accommodation after the summer.
However, the statistics have suggested that August is unusually busy. Demand levels are up nearly 80% compared to 2017-2019 averages, as pent-up demand from earlier in the year has come back to the market.
Demand not being matched by supply
In the last year to date, rental demand has risen by 19%, while the total stock of rental property is down by 13%.
Zoopla discovered that the current stock of homes available across the UK is around 30% lower in comparison to normal levels for this time of year. The rise in rental demand has occurred due to the lower supply in the sector, amid a decline in investment in the buy-to-let sector since the introduction of the additional 3% stamp duty in 2016.
While investment activity has boosted in the last 12 months due to the stamp duty holiday, this is a sign of slowing as the stamp duty comes to an end.
Market is picking up speed
Another signal of the pickup in activity was also identified in Zoopla’s research. As city life recommences, the average time to rent has now fallen to a five-year low.
In comparison to July last year, the average time between listing a rental property to agreeing rental tenancy has gone from more than 20 days to 15 days.
The market is moving fastest in coastal locations, however, markets in large cities are also among the fastest moving where the average time to rent is averaging under two weeks.
Chris Birds, Partner at Boxall Brown & Jones commented “the strong levels of rental demand seen during August will moderate in line with seasonal trends, but overall demand for rental property is likely to remain higher than usual in the coming months, as more people return to cities. As ever, this trend is subject to the current rules around COVID.”
“It was interesting to see a 6.8% increase in average rents to £692 pcm. This not only reflects the growing demand for rental properties, but also the growing popularity in the area.”
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