UK Rental Prices Increased up to 19.3% Over the Past 5 Years
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In Q1 2021 figures released by RightMove, rental prices in the UK increased up to 19.3% in the UK over the past 5-years.
The East Midlands region experienced the highest level of rental growth of 19.3% from Q1 2016 to Q1 2021 and 7.5% growth year-on-year, with most regions outside of London seeing strong rates of rental growth.
Supply of Rental Properties Not Meeting Demand
There is a clear imbalance between supply and demand, with the supply of rental properties not keeping up with demand from renters, causing upward pressure on rents.
The rental market has seen a 5% decrease in available properties in Q1 2021 compared to Q1 2020 and rental demand was 32% higher than in Q1 2020 and 59% higher than the typical April market (2017 to 2019).
Renters moving out of the sector by buying their own property has decreased as renters are hesitant to make large financial commitments in light of the COVID-19 pandemic, which is in-turn increasing the number of renters.
Demand for City Centre Rental Property
Tenant demand has increased significantly since the 5th April for cities such as Manchester, which has experienced a 5% increase in demand.
The average rent in Manchester is now 28% of an average earner’s income, compared to 30% in March 2019; therefore, affordability is increasing.
As more people are spending more time at home, with flexible working and a change in consumer behaviour with people spending more leisure time at home, the demand for a spare bedroom, more space and access to outdoor space has increased. Properties with access to communal gardens, on-site amenities, finished to a high standard and with a layout that meets the demand for flexible living are commanding higher rents.
Cities with the Highest Rental Price Growth Forecast
Industry experts JLL have forecast significant growth in cities such as Manchester, Birmingham, Liverpool and Leeds as renters flood back to the cities:
Savvy investors are building their property portfolios to profit from increasin grents across the UK, with a focus on the North West of England in cities such as Manchester and Liverpool where rents are expected to increase by up to 13.1% over the next 5-years:
Source: RightMove Rental Price Tracker Q1 2021
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