The UK rental market has revved up amidst a sharp rise in demand for city living, driving the highest rate of growth outside London for over a decade.
Spurred on by soaring demand in major cities, amid limited supply, rents are tracking at now five per cent higher year on year across the country excluding London according to Zoopla.
Monthly rents are averaging £790, up from £752 a year ago. This equates to renters paying an average increase of £456 per year.
However, the portal insists this is not a story of rapidly declining affordability. The government’s Office for National Statistics recently reported that average earnings for those in employment are rising faster than rents, with an 8.8 per cent rise in total pay year on year in June.
At a city level, Manchester, Reading and Leeds have moved from negative to positive rental growth territory, while Wigan and Mansfield are leading the pack of accelerated rental growth - with double digit growth of 10.5 and 10 per cent respectively.
Meanwhile, rental declines in London have bottomed out as demand rebuilds amid the ending of lockdown and the reopening of offices and amenities. While annual rental declines reached a fall of 9.8 per cent in London in February, they recovered to a more modest dip of 3.8 per cent in July.
Zoopla continues, saying that demand for rental properties rose by 33 per cent in August compared to the same period last year, and is tracking at an extraordinary 79 per cent above the 2017-19 average.
It says this unprecedented rate of growth is driven by the post-lockdown reopening of cities, and a return among tenants to the city rental landscape.
While the rental market is seasonal, with July and August proving busy historically, current activity levels are unusually high, precipitated by students and returning city-dwellers.
That said, in August, the stock of property available to rent was around a third below where it would be typically at this time of year. The recent surge in renters has ultimately eroded supply, which was already declining.
Gráinne Gilmore, head of research at Zoopla, comments: “The rental data illustrates how city life is resuming - with a sharp increase in demand in central cities.
“The strong levels of rental demand seen across the UK during August will moderate in line with seasonal trends, but overall demand for rental property is likely to remain higher than usual in the coming months, amid this swing back to city life.
“As ever, much will be dependent on the extent to which the current rules around COVID continue as they are. But given no deviation from the current landscape, the demand for rental property, coupled with lower levels of supply, will continue to put upward pressure on rents. In London, this will translate into rental growth returning to positive territory late 2021 or early 2022.”
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