Zoopla has released its quarterly Rental Market Report which shows that following a fall in rents before the pandemic, in the wider commuter zones of some of the UK’s largest cities rents are increasing. This is due to a rise in demand from renters who are seeking homes with more inside and outside space in response to the restrictions we have faced over the last 14 months.
Since the market reopened last June, renters have been reprioritising their location and needs – with home working looking set to continue either full or part time for many, many people are seeking additional space to accommodate their ‘new normal’ with room for a home office. In addition, after being restricted to our homes and only able to socialise within the confines of our gardens for most of the last year, demand for outside space is at a premium – whether it’s a communal garden, balcony or roof terrace. Demand for rural properties close to green open spaces has also increased.
Small areas of demand and rental performance have been redefined across inner and outer cities with rents in well-connected commuter areas seeing the strongest growth and across the UK as a whole, and excluding London, rents are running at 2.3% which matches pre-Covid levels, with demand increasing 21% year-on-year.
Across the UK it is taking 30% less time to rent out houses and 2% less time to rent out flats as renters look for more space and as a result, many landlords are reducing their rents in order to attract tenants where there is less demand, although bucking the trend, demand in the City Centre and West End of Glasgow is seeing a stable level of demand.
According to Zoopla, the outlook for the rental market for the rest of 2021 depends upon how fast the rollout of the vaccine can reduce the impact of Covid. However, the ongoing reopening of offices, shops, leisure and entertainment venues is continuing (despite Glasgow staying in level 3) has meant that many businesses are starting to get back to some normality. Flexible working appears to be continuing into the summer months which is forcing a shift in priorities and this supports the market for larger 2/3 bedroom houses and flats.
Add to this the UK-wide lack of new investment in rented property by private landlords and the supply of rental properties is not rising, which in turn is supporting a general rise in rental prices.