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National average asking rents outside of London hit a new record of GBP 1,088 per calendar month (pcm), rising from GBP 982 pcm last year – the first time annual growth has exceeded 10%.
What’s causing the rise in rents?
Underpinned by a supply and demand imbalance, Rightmove reported that there are more than triple the number of prospective tenants as there are rental properties available. With total tenant demand up 6% and available properties down by 50% compared to last year, rents are being driven up.
Rightmove also reported that tenants were signing longer leases, which was preventing some of the stock that would normally come back on to the market from doing so.
With unemployment at an almost-50-year low of 3.8%, and job vacancies at a record-high, renters are demanding more from their homes and are paying a premium to achieve their desired living experience.
But there’s good news for prospective renters seeking more choice. Attempting to keep pace with increasing demand, the number of new rental properties available has increased nationally by 5% in March compared to January, and 16% compared to February.
Will rents continue to rise at the same pace?
Thought leaders predict that rents will continue to grow over the course of the year at a slower pace. Rightmove project that UK rental growth excluding London will rise by 4.5% for the rest of the year; and that London rents will rise by 3.5%.
To find out the rental yields you could achieve from UK property, get in touch with one of our UK property consultants today.