The UK rental market is continuing to see strong demand, which is causing rents to increase and the time it takes landlords to let a property to decrease.
The strong desire to move during the COVID-19 pandemic has been felt across the UK rental market. Demand has continued at strong levels in recent months and is showing no signs of slowing down. With rental demand at such high levels and supply still low, this is causing rents to rise and the average time it takes landlords to let their properties to fall.
As lockdown restrictions continue to ease, demand has been building in city centre locations again. This will likely increase as offices and amenities start to open up further. Demand is also increasing in wider commuter zones and well-connected towns, according to Zoopla’s Rental Market Report.
During this time of year, the rental market is typically building towards the busy period in late summer. However, the demand in city centres in particular is outpacing growth currently seen elsewhere.
Demand in the rental market
Propertymark’s latest Private Rented Sector Report reveals 82 new prospective tenants registered per letting agent branch in April. This is down slightly from March’s figure of 84. However, this is still the highest figure on record for the month of April.
“We will be keeping a close eye on the sector in the coming months as the current strength of the sales market may be off-putting to private rental investors and talk of a potential impending taxation on property will be a concern for all types of landlords, but ultimately it is positive to see rent continuing to flow this month.”
Rents are on the rise
With this strong demand, rents are on the rise after a year of slower rental growth in many areas. Research from Propertymark reveals 67% of agents said they saw landlords increase rent. This is compared to 60% in March. Additionally, year-on-year this figure has more than doubled since April 2019.
Data from estate agency Hamptons shows rents in Great Britain increased by 5.9% annually in April. This is the fastest rate of growth since January 2015. Outside of London, rental growth hit double digit figures for the first time on record.
Time to let is decreasing
In April, it took only 8.9 days on average for landlords to let a property in Great Britain. This is the shortest amount of time since Hamptons started recording this data in 2013. The average home in the countryside only took 8.0 days to let. This is down from 31.9 days back in April 2019. Homes in the city are taking slightly longer with 10.6 days on average, but this is still a record low.
This is mainly down to a supply and demand in-balance. In April 2021, there were 45% fewer homes available to let in Greater Britain compared to April 2019. Half of regions across Great Britain recorded 50% or more fewer homes on the rental market. A lack of supply has meant that for the first time over half of rental homes were let within a week.
As the time it takes to let a property is decreasing, especially in certain areas, many landlords may be facing shorter void periods between occupation of their rental properties. Individual landlords’ experiences will differ, most of which depends on location, but minimising void periods also minimises the amount of time a property is not earning a rental income.
With rental demand remaining at such strong levels, this further shows the importance of the private rented sector and the need for more high-quality rental properties to be brought forward.