The rate at which rents are rising is at a 13-year high, while demand soared by 76% in the New Year, said Zoopla Research in their recent report.
- Based on new lets agreed, average UK rents are now £969 per month;
- The rate at which rents are rising reached a 13-year high of 8.3% in the final three months of 2021;
- Demand for rental homes soared by 76% in the New Year, compared with the same period between 2018 and 2021.
Top 10 UK cities leading in rent growth
| City | Annual change in rents, % | Average rent, £/pcm |
|---|---|---|
| Belfast | 10.90% | £658.00 |
| Nottingham | 10.60% | £766.00 |
| Bristol | 10.30% | £1,119.00 |
| London | 10.30% | £1,640.00 |
| Leeds | 9.60% | £782.00 |
| Cardiff | 9.50% | £872.00 |
| Glasgow | 9.50% | £711.00 |
| Manchester | 9.50% | £821.00 |
| Birmingham | 9.40% | £741.00 |
| Cambridge | 7.20% | £1,276.00 |
Source: Zoopla Research
London rents are up +10.3% on the year, but significant falls in 2021 mean average rents are up just £18 a month since March 2020.
Rents in prime areas of London are growing at an annual level of more than 20%.
The pace of rental growth will most probably slow during 2022. The January peak of demand eased with the end of the season trend. We expect the pressure of higher rents on supply to slow the market further down.
The supply in the rental market remains limited. Owners put only 8% of previously rented properties on the sales market in the second half of the last year. The trend indicates that few landlords were looking to exit the business.
The situation is more complicated than during the years before since Britain lost around nine million bedrooms in conversions to home offices.
Following the changes in stamp duty and taxes for landlords in recent years, the level of investment into the rental market reduced.
The current rise in rents for new tenancies forces more renters to stay at their existing property and agree with their current landlord. Unfortunately, this trend also contributes to reducing supply in the rental property market.
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