Both Zoopla and the Royal Institution of Chartered Surveyors (RICS) have news on rent increases driven by soaring demand and depleted supply.
A report from Zoopla shows rents outside London are rising at their fastest rate since 2008. Data shows that demand for properties in cities is spiking and that there is insufficient availability to meet the increased demand. Rents across the UK, excluding London, have risen by 5% in the last year. Major cities like Leeds and Manchester are showing healthy rent increases which reverses declines seen during the earlier stages of the pandemic.
Demand for rental property so far this year has increased by 19% while the number of rental homes available has fallen by 13%. This stock depletion is a result in part of many accidental landlords selling their properties in order to benefit from the price inflation in the sales market.
The lack of supply is not only leading to an increase in rents but also a reduction in voids between vacation and reletting. The average time between marketing a property for rent and agreeing a tenancy is now just 15 days, compared with 20 in July 2020.
Gráinne Gilmore, head of research at Zoopla, said: “There has been a sharp rise in demand for rental properties in recent months, especially in central city markets, signalling the return of city life as offices and other leisure and cultural venues continue to open up more fully.”
“As ever, much will be dependent on the extent to which the current rules around Covid-19 continue as they are. But 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. “
The findings of the Zoopla report are mirrored by similar news from RICS that their members are experiencing increasing demand but that there are insufficient new instructions to meet the demand. RICS is predicting rents will rise over the next three months due to continuing lack of supply.