This week we received the latest Zoopla Rental Market Report for Q4 2021, and so we have summarised some of the key findings which we think will be of interest to landlords and property developers.
The good news is that rental demand has risen amid the increased activity in city centres. However, supply is still constrained. This is leading to the fastest growth in rents in Q4 than at any time over the last 13 years.
UK rental growth is rising
The report shows that average UK rents rose 3.7% in Q4 2021, taking the annual rate of rental growth across the UK to +8.3%. A continued rise in rental demand underpinned this further rental growth. The average rent for the UK is now at £969 PCM. This is £62pcm higher than at the start of the pandemic.
London leads the way in rental growth, with a 10.3% annual rise. There was a fall in London rent during the pandemic, but they have started to rise again. In March 2020, the average London rent was £1,622, and in December 2021, it had increased to £1,640.
Rents have risen in every other region and country in the UK. Some detailed stats for our local area show:
East Midlands - Average rent (PCM) is £709 and % YOY (Dec 2021) is 8.0%
Nottingham – Average rent (PCM) is 766, and %YOY (Dec 2021) is 10.6%
Demand continues in cities
Rental demand has gathered momentum in city centres over the last six months as the pandemic started to ease. The report found that demand has firmly bounced back in city centres as offices have re-opened, students have returned, and the increased ease of global travel has allowed a release of pent-up international demand.
There was more activity in the suburbs and commuter zones during the pandemic. Whereas now there is a substantial rise in rents in the cities. Supply is tight as landlords sold many rental properties during the pandemic. In addition, due to low demand, we are finding that many tenants are remaining in their existing properties rather than risk trying to move elsewhere in the current climate. This is good news for landlords that prefer to retain tenants longer-term.
It is expected that rental growth will slow down during 2022, but we will keep you up to date as we receive further reports.
We continue to support landlords and property investors with managing their property portfolios; if you would like any advice, then you can contact us by calling 01623 490 120 or email