This update is a summary taken from the UK Rental Market Report issued by Hometrack. It’s useful for landlords and property investors to keep an eye on trends in the rental property sector. The main challenge in the rental property market is the discrepancy between demand and supply.

The increase in interest rates has meant that many potential first-time buyers are looking to rent as it's too expensive to buy. This increase in demand comes at a time when the supply of rental properties is still at an all-time low.

There has been a knock-on effect, as rents are now increasing in all parts of the UK. The graph below shows the percentage growth of rents -YoY for new lets.

Rents are increasing fastest in the largest UK cities, led by London where rents are up 17% or £273 per month over the last 12 months. In Nottingham, the average rental inflation is +12%. Rental inflation will only slow if demand weakens or supply increases significantly, or if we see a combination of the two.

Due to the high rent tenants are now looking at a range of options to help them to better afford to live in rental accommodation. Many are looking for shared accommodation so they can spread the costs with other tenants in the same home. The latest English Housing Survey (2020/21) shows that there is an equal 50:50 split between private renters with multiple incomes (couples or multi-person households) and single earners (single person or lone parents). The other option for younger people is to stay at home with their parents or relatives for longer. This is helping to ease the demand/supply challenge we are currently facing.

The demand for rented homes is only going to rise in the medium term, so it's important we encourage more supply from all forms of landlords, whether private individuals or large corporates. This is an area that’s going to continue to grow so for anyone looking to invest in the property sector it's certainly worth considering now whilst demand is high.

We work with landlords and property investors to help them manage their finances in the most cost-effective way, if you would like to find out more contact us by calling 01623 490 120 or by emailing This email address is being protected from spambots. You need JavaScript enabled to view it.