Record tenant demand and properties being let out quicker than ever before across Great Britain has led to the average asking rent of a home outside of London surpassing £1,000 (£1,007) per calendar month for the first time, according to Rightmove’s Quarterly Rental Trends Tracker. The latest data also shares positive news for city centres, which had been experiencing a mass exodus since the beginning of the pandemic, as tenant demand begins to return.
Rightmove’s latest property market insights show the average asking rent across Britain (excluding Greater London) is now 6.2 per cent higher than this time last year in every region and 2.6 per cent higher than in Q1 2021 – the biggest annual and quarterly jumps ever recorded by Rightmove.
Rental Hotspots in Q2 2021
Areas that have seen the biggest rent rises over the past year include city suburbs, commuter towns and coastal locations, with Rochdale (+32%), Folkestone (+26.7%) and Farnham (+19.8%) topping the rental hotspot charts.
London Rents in Q2 Increased for the First Time Since Before the Pandemic
The average asking rent is now higher than this time last year in every region except London, although the capital is starting to see an improvement. London rents grew by 1.5 per cent in Q2 compared to Q1, marking the first increase since Q1 last year before the pandemic started. However these stats. are still down by 3.1 per cent annually, with the quarterly increase being driven by the outer London zones.
Tenant Demand Returns to City Centres
At the start of this year, Rightmove reported double-digit annual declines in some of the biggest city centres across Britain and a flood of rental properties entering the market as many tenants chose to move out of cities. The latest data shows there are now signs that tenants are starting to return, helping to stabilise or increase rents.
In fact, Rightmove’s data reveals that asking rents in city centres around Britain are starting to recover as more renters plan a city move, with eight out of ten of some of the biggest city centres seeing higher rents than in June 2020.
One example of this city centre revival is Nottingham city centre where asking rents are up annually by 6.8 per cent, and the next best performing city centre Liverpool has seen rents increase by 3.8 per cent. Inner London (-6.8%) and Edinburgh (-4.0%) are yet to recover, but Rightmove’s analysts expect higher tenant demand will lead to rents rising again over the coming months.
Rob Cuffe, Director at Philip James in Manchester, said: “We’ve seen demand for properties in the city centre surge in the last month and shortage of stock is now our biggest problem. In fact, we currently only have 38 properties available to rent out of our 2,500 managed properties. We’re letting all of our properties in an average of just 10 days.”
Rightmove’s Director of Property Data Tim Bannister, said: “At the start of this year the impact that tenants leaving cities had on rents was clear to see, but with restrictions continuing to lift we’re seeing signs of the city centre comeback. As businesses settle into a more structured balance between home and office time, we expect this to continue for the rest of the year.
We’re also starting to see signs of London rents creeping up again, but they’re still lower than two years ago so it will take time.”
Properties Let in 21 Days
There is further good news for landlords as rental properties are standing empty for less time than ever. On average it is taking 21 days to secure a new tenant, and the fast-paced market has led to an annual drop of 36 per cent in the number of available rental properties. This pace has led to a drop in available stock of 36 per cent across Great Britain.
Bannister, explained: “Tenants across Britain are being faced with low stock and record rents in many areas, likely fuelled by some tenants signing longer leases last year and also perhaps by a rush of people who chose to move back in with family last year, who are now making plans to rent again and in many cases starting to think about their new daily commute.”
Rightmove’s Quarterly Rental Trends Tracker, which is based on over 470,000 properties, reveals that the number of prospective tenants contacting agents about properties for rent is currently 10 per cent higher than in July 2020 across Great Britain, despite last year benefitting from pent-up tenant demand when the rental market re-opened in mid-May in England.
Bannister added: “At the start of this year the impact that tenants leaving cities had on rents was clear to see, but with restrictions continuing to lift we’re seeing signs of the city centre comeback. As businesses settle into a more structured balance between home and office time, we expect this to continue for the rest of the year.
We’re also starting to see signs of London rents creeping up again, but they’re still lower than two years ago so it will take time.”
