Lettings Market Update

As a landlord, you need to know if the market has a sound footing. For future investing, it’s vital to get insight into the potential opportunity. We share the key facts from across the UK.

Huge opportunity for landlords in a fast-paced market

  • As the economy and country move back towards ‘normality’, rental demand will continue to rise.
  • City centres that have suffered from a reduction in tenant needs over the last year will also see an increase in demand as offices and amenities re-open.
  • An increase in demand with a constrained supply will continue to put upward pressure on rents.

The upward rise in demand has a knock-on effect to rents, with these increasing at some of the fastest rates seen in years. Even London is seeing some promise with rental value decline ‘improving’ to -3.8% in July, compared to -9.8% in February.

Rental growth outside London hits 13 year high

Upward pressure on rental prices means it could be an opportune time to be a landlord. Could you be earning more from your property?

A 5% rise in the average rent across the UK (outside of London) over 12 months to the end of July is the largest increase for well over a decade. This is due to the continued surge in demand as the economy starts to open more fully; this impact is being felt far and wide across the UK.

9.5%

9.5% Rental value increase in Scotland*

7.6%

Rental value increase in the South West

6.8%

Rental value increase in the North East

A return to rental growth in cities too

Major cities as well as smaller towns are seeing a rise in rental value, painting a rosy picture for landlords across the UK.

Rental growth over the last 3 months to July has seen an upswing back into positive numbers in some of the larger cities most affected by the events of the previous 12 plus months. Offices and leisure facilities re-opening and the return of students have all contributed to a rise in demand and a consequential rise in rental value. And other urban areas are also seeing large rental growth – for example Hastings, Barnsley and Wigan seeing 9% plus rises.

2.3%

Rental value increase in London inner boroughs

2.2%

Rental value increase in Edinburgh

2.5%

Rental value increase in Birmingham

Rental demand soars – but stock is down

The growth in demand and lack of supply, plus affordability factors, have enabled rents to increase in areas around the country

The market is moving faster than it has done in over 5 years, with properties being let almost as soon as they come to market. This is due not only to the imbalance between supply and demand, but to an improvement in relative affordability. So, while rental values have increased by 5% as noted, average earnings have risen by 8.8%.

In Scotland, demand and supply could be affected by potential rent control policy changes. In addition, legislation changes in Edinburgh may limit holiday lets supply and possibly increase numbers of mainstream rented properties.

19%

Increase in rental demand compared to this time last year

30%

Reduction in stock available to rent compared to usual levels

15 days

Average time to rent July 2021 compared to 20 days in July 2020, almost a week faster

We're here to help

If you are a landlord looking to improve their rental yield, or you would like to know more about your property’s rental value:

Statistics from the Zoopla Rental Market Report September 2021 except for *Homelet rental index August 2021 vs August 2020 comparison.