The rental market in the UK has witnessed significant changes over the past year, with a noticeable increase in rental values in all regions except London. It's a fascinating landscape that points to various underlying factors affecting supply and demand, regionally divergent trends, and overall growth in the rental market.
Rising Rental Values Across the UK
Excluding the capital, the average monthly rent across the UK now stands at £853, marking a 6.2% increase from the previous year. This trend is fuelled by a combination of growing demand for rental properties and a shrinking supply. In fact, new instructions were 9% lower in the first three months of 2021 compared to the same period in 2020 (TwentyCi).
This imbalance between supply and demand has supported rental values, contributing to the rise in average rents across various regions. The demand for rental properties is driven by various factors, including demographic shifts, economic conditions, and the ongoing impact of the Covid-19 pandemic on housing preferences.
London's Unique Situation
London's rental market presents a contrasting picture. Although there has been an uptick in rents agreed in 2021, an oversupply in the market has resulted in values falling by over 5% year-on-year.
The capital's rental market dynamics are influenced by a complex interplay of factors, including the movement of people within and outside the city, changes in employment opportunities, and lifestyle preferences. The increased availability of rental properties and changing demand patterns have created a unique market scenario in London, contrasting with the trends observed in the rest of the UK.
A Look Ahead
Across the UK as a whole, annual growth in rental values currently stands at 2.9%. This aligns with the projections for growth over the next year, according to the Royal Institution of Chartered Surveyors (RICS). The ongoing trends in supply and demand, economic recovery, and other macro factors will continue to shape the rental market in the coming months.
The UK's rental market is dynamic and multifaceted, reflecting both regional variations and broader economic and social trends. The surge in rental values outside London, coupled with the unique situation in the capital, presents opportunities and challenges for both landlords and tenants.
Whether you're a landlord looking to capitalise on the current market conditions or a tenant seeking the best value in your preferred location, Heenay Joshi Property Experts can provide you with the insights and support you need.
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Source: Dataloft, HomeLet, April 2020