MAY 2023
MARKET OVERVIEW
Rents continue to rise, but rental growth is slowing. With renter affordability increasingly stretched, many renters are having to be more flexible on location and extend their search to beyond their city.
SLIGHT SOFTENING
Despite rental prices climbing for the last 13 consecutive quarters, the pace of asking rent growth is slowing, and has softened for three quarters in a row (Rightmove). Average prime market rents continue to grow in all regions of England and Wales, with the average prime market rent at £3,798, up 15% year-on-year. Although supply remains an issue, there are signs of improvement, with the number of available properties to rent 6% higher than last year, although 46% below 2019 levels (Rightmove). The lack of stock is being felt countrywide, with all regions aside from Inner London having less than 1.5 months of available stock (TwentyCi). Although interest rates below 4% are now available for Buy-to-Let landlords (Nationwide), increased regulations remain concerning for landlords.
FLEXIBLE LOCATIONS
Renter affordability is becoming increasingly strained, as growth in private rental prices continues and inflation remains stubbornly high. Renters pay an average of 26.8% of their gross income on rent, up from 25.7% three years ago (Dataloft DRMA). The pandemic has changed the way people live, and with 44% of people continuing to work from home (ONS), renters are able to be more flexible on location to find more affordable properties. Analysis of ten major UK cities revealed that 42% of renters contacted their agents to move out of their city, up from 37% the same time last year. London has seen the biggest increase in the proportion of renters looking to leave, followed by Sheffield and Manchester (Rightmove February 2023).
£2,840 £3,798 +15.0% CONTINUED CLIMB
£1,350 £1,632 +0.2% £14 £1,900 £2,358 +6.8% £20 £3,900 £5,260 +20.5% £47 £1,200 £1,616 –12.7% £13 £1,500 £1,865 +4.7% £18 £2,200 £2,895 –2.5% £22 £1,800 £2,246 +1.5% £20 £1,390 £1,605 +16 0% £15 £1,410 £1,760 +9.1% £16 £1,250 £1,539 +5.0% £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% MAY 2022 JUN 2022 JUL 2022 AUG 2022 SEP 2022 OCT 2022 NOV 2022 DEC 2022 JAN 2023 FEB 2023 MAR 2023 APR 2023
£1,139 £2,840 £3,798
£1,187 £3,000 £3,878
£1,094 £2,650 £3,670