After a stressful year, the UK’s landlords are definitely due a bit of good news, and the country’s private rental prices have provided just that, with values across the UK increasing by 1.3% in the 12 months from March 2020 to March 2021, according to the Office for National Statistics (ONS).
The ONS findings are backed up by research from property websites such as Rightmove and Zoopla. In a separate report on UK rental prices, Rightmove also demonstrates that the time taken to let a property is at its shortest since 2011 in all seven regions of the UK, with the South West being the quickest at just 14 days to agree on a tenancy.
The South West proved to be the best-performing region across the board, experiencing the highest growth in rental prices at 2.4%. Wales outperformed Scotland and England, with figures of 1.5%, compared to 1% and 1.3% respectively.
While technically there were no losers, London experienced the most sluggish growth, with rents rising by just 0.5%; this relatively meagre rise brought down the rest of the country’s average.
Given that the nation has been rocked by repeated lockdowns and the entire country has been largely ‘working from home’ since the beginning of the pandemic, it’s unsurprising that rents were relatively flat in the capital, which has seen an exodus of inner-city renters looking to move into less densely populated spaces. A lack of travel and tourism has further affected the city by ravaging any short-term rental demand.
Rightmove also found an increased rental supply in London as short-term rentals were rebranded as long-term lets, exerting downward pressure on the rental rate. According to RICS (Royal Institution of Chartered Surveyors), London is the only region where rents are not expected to rise significantly over the next 12 months.
Even for London landlords, the figures can still be comforting when viewed as part of a long-term trend. Since January 2015, UK rental prices have increased by 10.2%, while ARLA Propertymark’s research found that the number of new prospective tenants entering the market increased for the second month in a row in February 2021. They also found that half the agents they polled saw landlords increase the rent in February nationwide.
While trying to predict growth in the property market is akin to predicting what will happen during the pandemic itself, as the UK’s vaccination levels increase and freedom of movement returns, it’s likely this will feed into the property market. More people will be keen to move, which combined with the twin drivers of the pandemic’s potential baby boom and increased divorce rate should lead to increased demand, driving rental prices up and the property market forward as we head into a new era.
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