Rental Prices Surge as 79% of Landlords Increase Rent

High levels of tenant demand and decreasing levels of rental accommodation has seen rental prices surge for the second month in a row with 79% of landlords increasing rents.

The figures released by Propertymark, the professional body for the UK property sector reported the average number of new tenants looking for a property per branch increase to 107 in August from 102 in July, which is the highest figure recorded for the second month in a row.

August is typically a busy period for the rental market as students start university, graduates find employment, workers relocate and tenants search for a new property after the summer. This year is exceptionally busy, with an 80% increase in demand compared to 2017-19 averages.

Decrease Supply of Rental Property

The shortage in supply of rental property is resulting in upward pressure on rents being charged.

The number of properties managed per branch decreased month-on-month to 196 in August from 204 in July. Compared to August 2020, the average number of properties managed was 208.

London had the lowest levels of rental properties with 126 per lettings agency branch.

‍

High Rental Increases

79% of landlords increased rents in August, up from 71% in July, which is the highest rate increase recorded.

The number of tenants successfully negotiating rent reductions Decreased from 1.1% in July to 0.4% in August. This is the lowest number recorded during the month of August since records began.

The CEO of Propertymark, Nathan Emerson, commented, “The continued increase in demand from tenants, coupled with the decreasing amount of rental stock available means we are seeing a worrying increase in rent prices for the second month running. The private rented sector provides homes for approx. 5m UK households and it is vital the service being provided by landlords is recognised. With the increasing pressure, more landlords need to be incentivised into the sector.”

‍

High Growth Areas

Rents in Manchester have risen by 1.4% in the last three months alone, with JLL forecasting a 16.5% increase over 5-years. In contrast, rents in London were down by -3.8% in July.

Regency Invest focus on these high growth areas such as Manchester, where prices remain affordable and investors are enjoying high yields from their buy-to-let property investments. In addition to rental growth, price growth is forecast at 28% in the 5-years to 2025.

Explore our range of Manchester Buy-to-Let Property Investments to see how you too can capitalise from these high levels of rental growth.

‍