AUGUST 2023
£2,900 £3,813 +10.5%
MARKET OVERVIEW
HIGH DEMAND
Rents are continuing to rise, although the pace of growth has cooled slightly. The supply demand imbalance remains, with economic turbulence encouraging some owners to return to renting and buyers to defer purchases.
SUPPLY EASE
In the prime market, average rents are £3,813, up 10.5% year-on-year. The pace of growth has slowed slightly from last month on an annual basis, but a persistent lack of stock continues to support prices. Renter demand is up 3% on June 2022 and 42% higher than June 2019. The gap between supply and demand has closed slightly, with available properties up 7% on June last year, although 42% below 2019 levels (Rightmove). Environmental issues will be a constraint on supply for some time. Recent Savills research showed over half of all homes in the private rented sector need upgrading to hit the target EPC C or above by 2028 and a survey by MRI found that 72% of renters consider it important that their building is managed in an environmentally friendly way.
RENTERS STAYING LONGER
Renters are looking to remain in their properties longer, partly due to the low levels of stock and rising rents in the open market. The average length for an initial rental contract in the second quarter this year was 12.7 months, up from 10.5 in the same period in 2019 (Dataloft Rental Market Analytics). One of the more noteworthy proposals in the Renters (Reform) Bill is the end of fixed term Assured Shorthold Tenancies (ASTs), where rental contracts are set to be open ended, increasing flexibility for renters. For many investors, the Renters Reform Bill is simply reinforcing good practice that they already follow and helps to squeeze out rogue landlords and raise standards.
£1,350 £1,630 +2.0% £14 £1,930 £2,393 +4.5% £20 £3,900 £5,190 +8.5% £47 £1,190 £1,611 –1.2% £13 £1,590 £1,999 +9.3% £18 £2,250 £2,989 +3.2% £23 £1,800 £2,286 +3.4% £20 £1,400 £1,607 +7 7% £15 £1,450 £1,757 +5.7% £16 £1,280 £1,588 +7.8% £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% AUG 2022 SEP 2022 OCT 2022 NOV 2022 DEC 2022 JAN 2023 FEB 2023 MAR 2023 APR 2023 MAY 2023 JUN 2023 JUL 2023
£1,164 £2,900 £3,813
£1,214 £3,000 £3,842
£1,118 £2,700 £3,694
