Renters are returning to city centres after a pandemic-driven exit, driving the highest rate of growth outside London for more than a decade.
Soaring demand and limited supply means rents are now an average of £790 a month, up from £752 a year ago, meaning that renters are paying £456 more each year, according to Zoopla’s quarterly rental market report.
Manchester, Reading and Leeds have moved from negative to positive rental growth since March, while Wigan (10.5%) Mansfield (10%) and Hastings (9.9%) are experiencing the highest growth. Rental falls in the capital have bottomed out as offices and amenities have reopened; while annual rental declines reached -9.8% in February, they recovered to -3.8% in July.
Demand for rental properties rose by 33% in August compared to the same period last year, and is tracking at 79% above the 2017-19 average, reports Zoopla, which says this unprecedented rate of growth is being driven by the reopening of cities.
Last month, the stock of property available to rent was about a third below where it would typically be at this time of year and competition is fierce with properties securing renters, on average, within 15 days of coming to market.
Inner cities have seen the sharpest rise in demand, with Edinburgh registering the highest growth since February.
Kate Eales, head of regional residential agency at Strutt & Parker, says: “This stock depletion is a result in part of many accidental landlords having now sold their properties – benefiting from the soaring demand in the sales market. Stock is also being absorbed by those who are renting tactically.”
Gráinne Gilmore, Zoopla head of research (pictured), believes overall demand for rental property is likely to remain higher than usual in the coming months.
She adds: “Given no deviation from the current landscape, the demand for rental property, coupled with lower levels of supply, will continue to put upward pressure on rents. In London, this will translate into rental growth returning to positive territory by late 2021 or early 2022.”