UK Rental Market
It is no secret that the UK rental market has grown substantially in recent months with a +8.3% annual change in UK rents. This has come on the back of high demand, particularly in city centre areas.
London, as many could have suspected, leads the way in terms of rental growth, but the likes of Leeds, Birmingham and Manchester have also seen significant growth.
Scotland has seen rental growth at a rate of 4.8%, with Edinburgh leading the way with a 7.2% rental growth.
All this growth poses the question of ‘How is this affordable?’.
£969 is the UK average monthly rent. Which, as a proportion of a single earner income, is generally still in line with 10-year average. There is flexibility in the rental market among people who have higher disposable income, as they have the ability to adjust. As demand continues to outstrip supply, the pressure on rents will continue in an upwards fashion, inevitably having an impact on those who have a lower income.
Demand was astronomically high in January, but has shown signs of easing into February. The latest Home Track report suggests that growth will slow in 2022, with 4.5% growth across the UK, excluding London.
As the demand peak falls back in the coming months, less pressure on rental supply will create more competition in the market and put the brakes on the scale of rental growth.
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