The lettings market has seen huge demand over the past 18 months, continuously driving rents to new record highs across the country.
As a result of the recent demand levels, the shortage of rental properties in the market has led to rises in rents per month, as the average UK rent has now hit £1078.
Latest market analysis has shown another 0.8% increase from March for areas outside London, whilst the capital has seen an increase of 0.7%, taking the average London rent to £1,770 per calendar month.
Much like England, Scotland has seen massive growth in the rental market too, with Scottish market analysis showing a 12.9% annual increase in rents.
Further increases look set to take place going into the later part of Spring and into Summer, with no immediate answer to the stock shortage.
The supply to demand imbalance
Across Great Britain, tenant demand is up by 6% and the number of available rental properties is 50% lower than this time 12 months ago.
The supply to demand imbalance in the rental sector has led to a fast-moving market, with intense competition between tenants for the available properties, pushing rents higher.
Simultaneously, rising costs are causing many renters to stay put in their current properties and agree to longer tenancies, restricting the number of rental homes available in the market.
Lack of stock has been one of the many impacts of the COVID-19 pandemic, with floods of office workers, students and international buyers returning to cities, causing the shortage of properties to rent.
There are more than three times as many tenants enquiring as there are rental homes available, meaning that landlords are able to choose from a number of eligible tenants.
But what does the future hold for the rental market?
As mentioned, there isn’t any immediate solution to supply to demand balance, with a new forecast predicting the UK will need nearly 230,000 new rental homes to avoid a shortfall if the current growth in demand continues.
Buy-to-let properties have drawn a lot of attention lately, with people questioning if the effort is worth the return.
When investing in buy-to-let properties, research is key.
Although tenant demand is at record high levels, buy-to-let investments are far more appealing to potential tenants when close to local amenities, good road networks and educational facilities.
For landlords, with rents expected to grow going into the second half of 2022, now could be the time to look for your next buy-to-let investment.
The average rental yield in the United Kingdom is 3.38%, meaning any percentage above that can be regarded as a strong rental yield, generating the most income for your property investment.
Green issues have become increasingly important to renters.
There have also been a lot of discussions lately around EPC and greener rental properties, with many renters openly saying they would pay more rent per month for greener homes and properties with a better EPC rating.
If you’re looking for some more advice on the current rental market, contact our expert team today