MHHG estate agents

Overview

The UK's rental market continues to display resilience and growth, as indicated by various prominent rental indices. Notably, annual rental growth rates of +7.1% and +8.0%, respectively. Additionally, there is a robust +9.2% increase in rental prices over the same period. The surge is despite typically presenting lower estimates, revealed a remarkable +6.2% increase in rents, marking the most significant annual rise on record.

Supply and Demand Dynamics

The demand for rental properties remains strong, with an average of 86 tenants registered per member branch, as highlighted in the Property mark Housing Insight Report. However, the availability of lettable properties has slightly decreased, resulting in a competitive market environment. Estate agents receive an average of 11 tenant inquiries for every available rental property, reflecting increased demand.

Despite high demand, the supply of housing lags. a 6% decline in the construction of new homes in 2023, falling significantly short of the government's target. The scarcity of landlord instructions, coupled with a decline over the past year, contributes to the shortage of available properties, putting upward pressure on rental prices.


Regional Rental Variations

Regional disparities in rental growth are evident. The Northeast exhibits the lowest growth rate at 4.6%.


Rental Yields

Rental yields have seen improvements across most regions of England and Wales. Wales, the North West, and Yorkshire & Humber lead with robust returns for investors, showcasing average yields of 8.9%, 8.6%, and 8.4%, respectively. Despite exhibiting the lowest yields at 5.5%, average UK yields of 6.4%, with the North East boasting the strongest yields at 8.7%.

The UK's rental market remains dynamic and responsive to changing economic and demographic factors, with regional variations and supply-demand imbalances influencing rental growth and yields.