Report summary
Rental growth is being supported across the country as demand outstrips supply. Demand is being underpinned by more potential first-time buyers staying in the market for longer, amid a squeeze in mortgage lending for those with smaller deposits.
Mirroring the sales market, there is rising renter demand for larger homes – particularly those with outside space.
Time-to-let is now down from an average 20 days to 18 for flats – and it stands at just 16 days for houses.
However, the rental market is running at two speeds. While rents are rising across most regions of the country, they have fallen sharply in London – down -5.2% year-on-year.
“The split in the rental market caused by COVID-19 has now crystallised, and we’re seeing the two-speed market firmly entrenched.
“For most of the UK, the demand/supply gap is underpinning moderate levels of rental growth. We haven’t seen the exodus of students from cities and, as more people are staying in the rental market given the squeeze on mortgage lending, higher levels of demand will continue to underpin rents.
“At the same time however, muted earnings growth will start to limit the headroom for rental growth in some markets.
“The search for additional space, both indoor and outdoor, within the rental sector is also set to continue as the country goes through additional periods of lockdown.”
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