We have reviewed the latest Zoopla UK Rental Report and created a summary of the key points that will interest landlords and property investors.

UK Rental Growth

Rental growth continued to gain momentum in Q1 as high levels of rental demand put upward pressure on rents. The average monthly rent climbed to £995 from £897 a year ago, taking the annual rate of growth to +11% according to the Zoopla index, which is based on new lets agreed.

The rate of rental growth has gained momentum across most markets in the last six months as post-pandemic demand surged back into city centre markets and the supply of properties for rent struggled to keep pace.  This sharp growth comes after a period of moderate rental growth in most of the UK however, with growth outside London pegged at between 1% and 4% for much of the last decade

Regional trends

There has been strong annual rental growth across most regions of the UK, ranging from 15.7% in London to 6% in Scotland.

The chart below shows the dynamics in terms of supply and demand across the regions. However, it is notable that there isn’t a straight-line relationship when it comes to the gap between supply and demand and rental growth. Even in the East Midlands, where supply constraints are less pronounced than in London and the Southwest, there is still double-digit rental growth given the strength of demand. But it is likely, as demand levels normalise, the markets with less marked supply constraints will be the first to see a softening of rental growth rates – including the East Midlands, West Midlands, and East of England.

UK rental growth is being driven by high rental demand and limited supply, trends that are more pronounced in city centres. The surge of post-pandemic pent-up demand will normalise through Q2 and Q3.

In a market which has registered double-digit annual rental growth, landlords in local markets will find increased sensitivity to pricing among renters. Data shows that, on average, tenants are staying put in their current properties for longer, which may be partly due to not wanting to move into a new rental property where a larger rent increase will be applied.

We expect rents to continue to rise this year, but at a more modest pace, with UK rental growth excluding London at 4.5% by the end of the year, which is in line with independent forecasts for earnings growth for 2022. We forecast London rental growth to be running at around 3.5% by the end of the year.

If you are a landlord or property investor and would like to find out how we can support, you to manage your portfolio and finances please do get in touch by calling 01623 490 120 or email This email address is being protected from spambots. You need JavaScript enabled to view it.