With the UK having recently seen a surge in property rental rates, we take a look at what this might mean for landlords and tenants.
Why are UK rents increasing?
Zoopla states that UK rents have seen their highest growth rate since 2008 due to a couple of things.
Firstly, the demand for city living is at an all-time high, as risks associated with going into the office are fading since the vaccine rollout. A report by GHD supports this as it found up to 40% of people in the UK are considering moving home since the pandemic, and that most of these people want to relocate to urban areas.
Secondly, there is a lack of rental property across the country, and imbalance between demand and supply, is contributing towards the higher rents being charged.
What are the average UK rental rates in 2021?
Although rents in London are slightly down since 2020 by 3.8%, the rest of the country (including the West Midlands and Birmingham) has seen an average rental increase of 5%.
This means the average rental rate sits currently at around £943pcm per property, with the average cost outside of London sitting at an average of £790pcm.
What do higher rents mean for UK tenants?
Zoopla’s findings outline how tenants might struggle to find somewhere to rent due to lack of available properties. They do, however, say that the 8.8% rise in earnings since 2020 means that tenants are generally able to afford the rental increase we are seeing in the UK.
If you are a tenant who is struggling to find somewhere to rent, please get in touch with our team at John Shepherd Lettings, and we will be happy to help you.
What does this mean for UK landlords?
In simple terms, the current UK rental climate is a landlord’s dream.
The West Midlands’ available rental stock is currently sitting at mere 3.1%. This is a percentage of available properties awaiting a tenant, in relation to the total amount of properties that have a tenant in situ.
If you are either an existing landlord, or a potential landlord who is looking to invest in a buy-to-let property within the West Midlands (the area we cover at John Shepherd Lettings), then this small percentage is particularly good news.
Why you ask? PRT states that ‘… choosing to invest in a region with a lack of available rental properties [low percentage] on the market means you have a great chance of securing reliable, long-term tenancies in high-demand markets”.
This means that letting a property in today’s climate will not only achieve a higher yield, you can relax a little more with the knowledge that your tenants are going to be good ones.