Some rents soar 25% in a year says leading lettings agent

Rents in some of the most popular locations of the country have risen 25 per cent in the past year according to a leading lettings expert.

Kate Eales, head of regional residential agency at Strutt & Parker, says: “In the most desirable areas, there’s evidence of growth up to 25 per cent. 

“We recently let a home in the Cotswolds for £3,750 pcm when it was previously let out at £2,200 and another was let for £5,500, up from £4,100.

“The recovery in the rental market has, in many ways, mirrored the boom in the sales market, with people looking for homes that accommodate a different set of needs shaped by their lockdown experience.

“Lack of stock and high demand are inevitably driving price growth. This stock depletion is a result in part of many accidental landlords having now sold their properties - benefiting from the soaring demand in the sales market.

“Stock is also being absorbed by those who are renting tactically, making them as procedable as possible when their perfect property comes to market - a trend particularly prevalent amongst London leavers. “

Eales’ comments come as property portal Zoopla reports that even at more modest levels of the market, dramatic rises have been seen. 

Spurred on by soaring demand in major cities, amid limited supply, rents are tracking at now five per cent higher year on year across the country excluding London according to Zoopla.

Monthly rents are averaging £790, up from £752 a year ago. This equates to renters paying an average increase of £456 per year.

However, the portal insists this is not a story of rapidly declining affordability. The government’s Office for National Statistics recently reported that average earnings for those in employment are rising faster than rents, with an 8.8 per cent rise in total pay year on year in June.

At a city level, Manchester, Reading and Leeds have moved from negative to positive rental growth territory, while Wigan and Mansfield are leading the pack of accelerated rental growth - with double digit growth of 10.5 and 10 per cent respectively.

Meanwhile, rental declines in London have bottomed out as demand rebuilds amid the ending of lockdown and the reopening of offices and amenities. While annual rental declines reached a fall of 9.8 per cent in London in February, they recovered to a more modest dip of 3.8 per cent in July.

Zoopla continues, saying that demand for rental properties rose by 33 per cent in August compared to the same period last year, and is tracking at an extraordinary 79 per cent above the 2017-19 average.

It says this unprecedented rate of growth is driven by the post-lockdown reopening of cities, and a return among tenants to the city rental landscape.

While the rental market is seasonal, with July and August proving busy historically, current activity levels are unusually high, precipitated by students and returning city-dwellers.

That said, in August, the stock of property available to rent was around a third below where it would be typically at this time of year. The recent surge in renters has ultimately eroded supply, which was already declining.