JULY 2023
MARKET OVERVIEW
CONTINUED RISE
Annual growth in rental values continues to increase in the traditionally busy summer months, with little sign of an imminent slowdown. Affordability remains stretched, with renters expanding their search areas.
HIGH DEMAND
In the prime market, average rents have risen 11% year-onyear, with prime rental growth currently strongest in London and Wales. Demand per rental property is 162% above May 2019 levels (Rightmove), leading to fierce competition and agents reporting that more than a quarter of properties are being let above the listing price (Dataloft Inform Poll of Subscribers). With rents having risen faster than average earnings for the last 21 months (Zoopla), affordability is tight. 15% of renters say it is very difficult to pay their rent, a jump from 10% in November last year (ONS Opinions and Lifestyle Survey). Renters are being forced to change their search behaviour, with a 50 km2 increase in rental search areas (Rightmove).
SUPPLY
The supply demand imbalance remains. Despite the supply of homes for rent being unlikely to significantly improve in the near term, a slowdown in the sales market may help; fewer landlord sales and owners renting out homes as they wait for any price falls to pass could marginally boost rental stock. Although a steady stream of landlords are indeed leaving the sector, this has been the case since 2018, and the trend is not accelerating (Zoopla). The rental sector remains strong as a medium-to long-term investment, with more than one in four landlords with over five properties planning to expand their portfolio over the next year (Rightmove). Rental growth of 6% per annum is predicted over the next five years (Royal Institution of Chartered Surveyors).
£2,900 £3,822 +10.9%£1,350 £1,633 +0.0% £14 £1,900 £2,340 +2.3% £20 £3,900 £5,218 +12.5% £47 £1,200 £1,624 –12.9% £14 £1,550 £1,960 +5.9% £18 £2,200 £2,895 –1.0% £22 £1,800 £2,263 +2.6% £20 £1,400 £1,605 +10 3% £15 £1,450 £1,762 +5.4% £16 £1,260 £1,581 +7.5% £16 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% JUL 2022 AUG 2022 SEP 2022 OCT 2022 NOV 2022 DEC 2022 JAN 2023 FEB 2023 MAR 2023 APR 2023 MAY 2023 JUN 2023
£1,156 £2,900 £3,822
£1,205 £3,000 £3,851
£1,110 £2,700 £3,696
