Boomerang tenants help city rents grow & competition double for flats
- As tenants boomerang back to cities, a number of city centres across Great Britain have seen double digit growth in rents, after a year of falls:
- In Bristol, Nottingham and Glasgow, rents are now over 10% higher than pre-pandemic levels
- High demand and properties being let out quickly has led to rents outside London rising at the fastest rate ever recorded by Rightmove, up by 8.6% on a year ago
- London starts to recover, with rents up annually for the first time since the pandemic started
- Competition among tenants for flats is up by almost double (+95%) that of a year ago, the biggest jump of any property type, with three and four bed flats seeing the hottest competition
Tenants boomeranging back to the city has led to heady rental growth in some of Great Britain’s biggest city centres.
Rightmove’s Quarterly Rental Trends Tracker reveals that some city centres have not only bounced back from the declines recorded during the year since the pandemic started, they have now hit double digit growth and are outpacing the national average.
Across Britain, rents are rising at the fastest rate ever recorded by Rightmove, now up 8.6% annually outside London, and the capital is finally showing signs of growth, with rents up by 2.7% on a year ago.
The boomerang effect on city centres
In Birmingham city centre rents fell by 5% between February 2020 and February 2021, but by September this year the increased demand helped them to grow to 10% higher than pre-pandemic levels.
It is a similar picture in Nottingham city centre where rents fell 2%, and have now grown to 11% higher than before the pandemic.
Edinburgh city centre has seen rents grow by £100 since February of this year, but they still trail by 5% when compared with February 2020.
|City centre||Average asking rent
vs Feb 2020 (one year into pandemic)
|Average asking rent
vs Feb 2020
Increase in tenant demand versus
Fastest pace ever recorded for rents outside London
Total rental demand is now up by 39% compared with the same time in 2019, and up by 11% compared with a strong September last year.
This demand has led to properties being snapped up at the quickest rate ever recorded, at 17 days.
The speed and strength of demand in the market has pushed rents up to 8.6% outside London, and they are up over 10% in the North West, North East, the East Midlands and Wales.
The available stock shortage is most pronounced in suburban and rural areas, which has led to a shift in the make-up of total available properties on Rightmove. Of all the available rental properties on Rightmove, 64% of them are now in urban locations, a jump up from 48% pre-pandemic.
The proportion of available properties that are in the suburbs has dropped from 46% to 33%, while rural areas have declined from 6% to 3%.
|Proportion of all available rental stock August 2021||Proportion of all
available rental stock
Flats back in fashion, with room for an office?
Tenants looking to move are seeking out bigger flats, leading to the hottest competition for three and four bedroom flats. Competition for a four bedroom flat is up by 131%, and up by 124% for a three bedroom flat.
Competition within the flats market overall is up 95% on average than in September 2020, compared with a 37% increase for houses.
Rightmove’s Director of Property Data Tim Bannister said: “A year of various lockdowns saw many city centres hit with either a complete standstill in rental growth, or falls of over ten per cent in some cases, as tenants moved further out or back in with family temporarily. But as society opened up again cities have not only bounced back but are now seeing strong rental growth, fuelled by increased tenant demand and limited available stock. It’s still easier to secure a place in a city centre than in some of the hottest suburban and rural rental markets right now, but as more tenants boomerang back to busier locations this is likely to change.
“The shortage of rental properties in the market has led to Rightmove recording the fastest ever pace of rent rises in a year than ever before, and there are finally green shoots of growth in London’s rental market, with the first annual rise since before the pandemic started. Demand is notably up in London compared with this time last year, another sign that people are reconsidering where they want to live.”