According to property website Zoopla’s latest Rental Market Report, the average rents across the UK have risen by 9.7% on the previous year, with rents expected to rise on average by 5% in 2024 – while rents in London are expected to rise by just 2% over the next 12 months.
The average UK rents have risen by 9.7% over the last 12 months according to Zoopla’s latest Rental Market Report, with 2024 expected to bring an additional rise of between 5% and 8% over the year, however, rents in London are only expected to rise by 2% over the year – 3% lower than the national average.
Demand for rental properties in the UK market is also now 32% higher than the five-year average, while the number of homes available to rent is 18% lower, and the flow of new property supply is 6% lower than the five-year average.
“UK rental growth drops to 9.7% with the biggest slowdown in London”‘‘
The chronic imbalance between supply and demand within the UK rental market has been a problem for the market for the last three years, and during this time, the average rent has increased by 33% - an average of £3,360 each year.
Over the last three years since the beginning of the Covid-19 pandemic, there have been several reasons for the UK rental market’s stellar performance and the strong levels of rental demand the industry has experienced, including the strength of the labour market, good employment growth, and record levels of overseas students coming to study in the UK.
While the market is slowly beginning to return to a less frenetic state, Zoopla has predicted that we will not start to see the supply and demand imbalance level out for another three years – with 2027 expecting to bring with it more stable levels of available properties.
As the market shifts into a buyers’ and renters’ market, some regions in the UK are experiencing mass reductions in rents to attract tenants to their properties – nowhere more prominent than London, which has had 10% of listings reduced by 5% or more on the asking rent over the last month.
“We expect London rents to slow to around +2% growth in 2024 as rents are highest and affordability is lowest in London. The average renting household in London (1.25 people) already spends 40.4% of their earnings on rent compared to a UK average of 28.4%.”‘‘
At Beech Holdings we have experienced an incredible level of rental demand across our portfolio over the last three years specifically, with our in-house lettings team repeatedly setting all-time records despite continually delivering more rental properties to Manchester.
To speak with our team about how you can profit from the state of the UK rental market or learn more about our available investment opportunities, get in touch or call directly at +44 (0) 161 791 4600.