The month of August experienced a sharp increase in demand for rental properties in cities with the return of workers to offices and students to universities.
Rents in Manchester have risen by 1.4% in the last three months, with Birmingham seeing a 2.5% increase and Edinburgh a 2.2% increase.
August is typically a busy period, with students starting university, graduates finding employment, workers relocating and tenants searching for a new property after the summer. This year is exceptionally busy, with an 80% increase in demand compared to 2017-19 averages.
The lack of supply of private rental accommodation and increase in demand has led to the highest level of rental growth since 2008, with rental growth outside of London is up 5% year-on-year.
The average monthly rent outside of London is now £790, increasing from £752 last year.
Rental growth by region:
Rent has seen the highest level of growth in more affordable areas where the proportion of income of single earners to pay monthly rent below the average for the UK at 32%.
The decline in rents in London were at -3.8% in July, which industry experts believe have now bottomed out.
Rents were down -9.8% in February 2021, during the post New Year lockdown.
The demand for rental accommodation is up 19% year-on-year whilst the supply of rental property has decreased by 13% and the available properties to rent is down 30% compared to August averages, fuelling rent increases.
The surge in demand for properties to buy has also impacted upon the rental sector as some property sellers decided to sell, then rent until they found a new property, or, trial living in a new area. one in ten homes in July were rented to Stop Gap Renters. Click here to read more.
The lack of properties to buy has also impacted landlords looking to expand their portfolios, with properties selling over the asking price to home movers, causing many investors to delay their purchase of properties in the secondary market.
Property investors who are looking to build up their portfolio over the next year to capitalise on the increase in rents should be looking at the areas with the highest rental yields and capital appreciation:
Buying properties off-plan can also ensure that you get a good deal on your purchase, with properties under construction often sold below market value with an excellent range of incentives to reduce the purchase costs.
Regency Invest offer a range of buy-to-let property investment opportunities in the North West of England, highlighted by Shawbrook Bank as to where property investors should be looking for their next buy-to-let investment:
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