Renters expand search areas as affordability bites

Posted on Tuesday, July 11, 2023

Annual growth in rental values continues to increase in the traditionally busy summer months, with little sign of an imminent slowdown. 

This is according to Nicky Stevenson, managing director of Fine & Country, who adds that as a result, affordability remains stretched, with renters expanding their search areas. 

“In the prime market, average rents have risen 11 per cent year-on-year. The North East and South East are the only regions where the average price of a prime monthly rental is lower year-on-year. 

“According to Rightmove, demand per rental property is 162 per cent above May 2019 levels, leading to fierce competition and more than a quarter of properties being let above the listing price” Stevenson comments. 

“Zoopla report that with rents having risen faster than average earnings for the last 21 months, affordability is tight. According to the ONS Opinions and Lifestyle Survey, 15 per cent of renters say it is very difficult to pay their rent, a jump from 10 per cent in November last year. 

“As a result, renters are being forced to change their search behaviour, with Rightmove reporting a 50 km2 increase in rental search areas.”

“The rental sector remains strong as a medium-to-long-term investment, with more than one in four landlords with over five properties planning to expand their portfolio over the next year. According to the Royal Institution of Chartered Surveyors, rental growth of 6% per annum is predicted over the next five years” Stevenson concludes.

Via @LandlordToday