APRIL 2023
MARKET OVERVIEW
PRESSURE ON RENTERS
Rental growth is expected to remain strong throughout the year, supported by persistent low stock levels and increasing demand as we transition into the warmer months.
SUPPLY SQUEEZE
The average prime market rent is now £3,762, up 14% year-onyear, with many regions of England and Wales still witnessing positive annual growth. Annual prime rental growth in London is 21% and is still outperforming the rest of the country, driven by a shortage of supply. Private rented housing supply has grown just 1% since 2016 (Hometrack) and is set to remain generally static in 2023, particularly considering the recent interest rate rise and the ignoring of buy-to-let landlords in the Spring Statement. Properties are still being snapped up, with 63% of agents saying properties are taking less than a week to go from listed to let, and 39% citing stock levels lower than a year ago (Dataloft poll of subscribers March 2023).
INFLATIONARY PRESSURE
Despite a slight slowdown from its peak of 12.3% in mid 2022, rental inflation is still outpacing earnings growth, with no signs of respite. Average rents for new lets have increased by 11.1% in the last year, compared to an increase in earnings of just 6.7%. In the last three years, rents have risen by 20%, an extra £2,220 a year, increasing strain on renters (Hometrack). In the same period net happiness amongst renters has dropped 8%, with 37% of renters concerned about security of tenure (Sigma Capital). These results highlight the need for more comfortable, affordable renting options, particularly in light of the uncertainty amongst renters and the ongoing cost of living crisis.
£2,810 £3,762 +14.1%
£1,350 £1,631 +3.1% £14 £1,900 £2,365 +7.3% £20 £3,900 £5,280 +20.9% £47 £1,200 £1,611 –11.6% £13 £1,500 £1,875 +5.5% £18 £2,160 £2,907 –2.2% £22 £1,750 £2,189 +1.1% £20 £1,360 £1,600 +15 9% £14 £1,400 £1,699 +4.8% £16 £1,250 £1,541 +5.6% £15 Please
note: The change in premium rents for the North East seems disproportionately low. Some of this can be attributed to renters seeking smaller, more affordable accommodation in light of the rising cost of living. There have also been fewer particularly high value lets in the last 12 months which has lowered the premium rent threshold level.
0% 2 5% 5% 7 5% 10% 12 5% 15% 17 5% 20% APR 2022 MAY 2022 JUN 2022 JUL 2022 AUG 2022 SEP 2022 OCT 2022 NOV 2022 DEC 2022 JAN 2023 FEB 2023 MAR 2023
£1,124 £2,810 £3,762
£1,166 £2,940 £3,839
£1,085 £2,620 £3,682
