MHHG estate agents

The rental market has experienced a continued upward trajectory in rents, although the pace of growth has begun to taper off. As renters face mounting affordability challenges, they are compelled to adopt a more flexible approach to their housing search, expanding their scope beyond their current city.

There is a deceleration in the rate of asking rent growth, marking three consecutive quarters of softening. Despite this slowdown, average prime market rents continue to increase across all regions of England and Wales. Currently, the average prime market rent stands at £3,798, representing a 15% year-on-year surge.

The supply of available rental properties remains a concern, although there are indications of improvement. The number of properties available for rent has increased by 6% compared to the previous year. However, it is important to note that this figure remains 46% below the levels recorded in 2019. The scarcity of rental stock is a widespread issue, with the exception of Inner London, as all regions in England and Wales have less than 1.5 months' worth of available stock.

Despite the availability of attractive interest rates below 4% for Buy-to-Let landlords, there are lingering concerns among landlords due to the implementation of increased regulations. This factor contributes to the overall complexity and uncertainty of the rental market.

The strained renter affordability situation is further exacerbated by persistently high inflation and the continuous growth in private rental prices. Renters now spend an average of 26.8% of their gross income on rent, a notable increase from the 25.7% recorded three years ago.

The COVID-19 pandemic has significantly altered people's lifestyles, with remote work becoming a norm for a considerable portion of the population. This shift has allowed renters to consider more flexible housing options in their search for affordability. Recent analysis of ten major UK cities revealed that 42% of renters have reached out to their agents seeking to relocate outside their current city, reflecting a rise from 37% during the same period last year.

In summary, while rental prices in the UK continue to rise, the pace of growth has shown signs of slowing down. Renters, faced with mounting affordability challenges, are exploring alternative locations to find more affordable housing options. The shortage of rental stock remains a concern, but slight improvements have been observed. Landlords, despite the availability of favorable interest rates, remain wary due to increasing regulations. The evolving dynamics of the rental market and the impact of the pandemic have undoubtedly reshaped the way people approach their housing choices.