Rent prices inch up as rental market grapples with supply-demand dynamics

Rent prices inch up as rental market grapples with supply-demand dynamics

0:01 AM, 26th April 2024, About 3 months ago 1

Text Size

New data reveals the UK’s rental market is experiencing a slowdown in inflation.

Nicky Stevenson, managing director of Fine and Country, says whilst supply has seen a modest improvement, the gap between availability and demand is still influencing the market.

She adds that rent prices continue to increase across the country.

Cooling trend in rental inflation

Ms Stevenson said: “Rental growth has moderated to +7.5%, a decrease from +9.8% recorded a year ago.

“The cooling trend in rental inflation is evident across the UK, with London witnessing the most substantial deceleration.

“Despite a slight uptick of 0.9% in rents in March, based on Hometrack data, rental demand has diminished by a fifth over the past year.

“Contributing factors include the waning effects of the pandemic, a slowdown in the labour market, and enticing lower mortgage rates for first-time buyers, as reported by Zoopla.”

Supply and demand imbalance

Ms Stevenson notes that since the pandemic, rents have escalated by an average of 29%, pushing a significant number of properties into higher price brackets.

Currently, more than half (51%) of rented properties in the UK are located in areas where the average rent exceeds £1,000 per month – nearly double the figures from five years ago, according to Zoopla.

In the prime rental market, the average rent stands at £3,950, reflecting a 2.1% year-on-year increase. The South West emerges as the frontrunner in prime rental growth, witnessing a robust 14.7% annual surge.

Ms Steveson says the supply and demand imbalance will still cause problems for tenants.

She said: “The evolving dynamics of the UK’s rental market underscore the resilience and adaptability of the sector amidst changing economic landscapes. The moderation in rental growth, combined with a significant increase in supply, offers a glimmer of relief for tenants.

“However, the persistent demand-supply imbalance remains a dominant force, ensuring that the upward pressure on rents persists. As the market continues to mature post-pandemic, we anticipate further adjustments to cater to evolving tenant needs and preferences.”

Share This Article


Cider Drinker

Become a Member

If you login or become a member you can view this members profile, comments, posts and send them messages!

Sign Up

8:57 AM, 26th April 2024, About 3 months ago

𝐌𝐬 𝐒𝐭𝐞𝐯𝐞𝐧𝐬𝐨𝐧 𝐧𝐨𝐭𝐞𝐬 𝐭𝐡𝐚𝐭 𝐬𝐢𝐧𝐜𝐞 𝐭𝐡𝐞 𝐩𝐚𝐧𝐝𝐞𝐦𝐢𝐜, 𝐫𝐞𝐧𝐭𝐬 𝐡𝐚𝐯𝐞 𝐞𝐬𝐜𝐚𝐥𝐚𝐭𝐞𝐝 𝐛𝐲 𝐚𝐧 𝐚𝐯𝐞𝐫𝐚𝐠𝐞 𝐨𝐟 𝟐𝟗%, 𝐩𝐮𝐬𝐡𝐢𝐧𝐠 𝐚 𝐬𝐢𝐠𝐧𝐢𝐟𝐢𝐜𝐚𝐧𝐭 𝐧𝐮𝐦𝐛𝐞𝐫 𝐨𝐟 𝐩𝐫𝐨𝐩𝐞𝐫𝐭𝐢𝐞𝐬 𝐢𝐧𝐭𝐨 𝐡𝐢𝐠𝐡𝐞𝐫 𝐩𝐫𝐢𝐜𝐞 𝐛𝐫𝐚𝐜𝐤𝐞𝐭𝐬.
Does Ms. Stevenson also ‘note’ that RPI has risen by 32% over the same period? Or is property rental immune from inflation. Rents have fallen in real terms.
Meanwhile LHA rates in my area have risen by just 11%. There are no properties available that would be covered fully by LHA. Disabled people need to use funds meant for other needs to top up their rent payments.

Leave Comments

In order to post comments you will need to Sign In or Sign Up for a FREE Membership


Don't have an account? Sign Up

Landlord Tax Planning Book Now