Fine & Country Lettings Market Report April 2024

MARKET OVERVIEW

RENTAL INFLATION SLOWING

UK rental growth continues to moderate. While there’s a slight improvement in supply, the disparity between supply and demand persists.

EASING DEMAND

Rental growth continues to ease to +7.5%, down from +9.8% a year ago. Rental inflation is cooling across the whole of the UK, with London seeing the biggest slowdown. After a few months of falls, UK rents rose 0.9% on a monthly basis in March (Hometrack). Rental demand has declined by a fifth over the last year as temporary pandemic effects fade away, the labour market slows down, and lower mortgage rates encourage first-time buyers (Zoopla). Supply levels are improving, with Propertymark’s most recent Housing Insight Report finding a 29% increase in the number of properties available to rent, now standing at an 18-month high. Despite this, demand continues to outstrip supply and rents are set to continue to grow.

PRIME MARKETS

The average void period shortened in February, down to 18 days from 22 days in January, an 18% reduction. All regions in the UK recorded shorter void periods, except the South West which saw voids remain the same (Goodlord). Since the pandemic, rents have grown an average of 29%, pushing many properties into higher price brackets. Just over half of rented properties in the UK (51%) are now situated in areas where the average rent exceeds £1,000 per month. This is nearly double the number of rental properties within these high-priced markets compared to five years ago (Zoopla). In the prime market, average rents have reached £3,950, up 2.1% year-on-year. Prime rental growth is strongest in the South West, with a rise of 14.7% year-on-year.