Record rents outside London & demand shift creates challenge for smaller flats

Rightmove logo
  • Asking rents have hit a record outside London to £964 per month, driven by record demand from renters
  • London is only region where rents are falling, down 6.8% in Inner London, while Outer London is up by 0.8%
  • Two bedroom houses have replaced studio flats as the most in demand property type, as post-lockdown renters look for a spare room to work from home
  • Total rental stock is up by 20% compared to this time last year, though available stock is up by just 2% nationally, but up by 80% in London:
    • Outside London, increased demand has led to available stock of two bed houses now 46% lower than this time last year, while studio flats are up by 11%
    • In London, available stock of two bed houses is up by 2%, while studio flats have doubled (+100%)

 

Overview

Asking rents outside London have been driven to a new high, fuelled by record demand from tenants, and by strong price growth in the South West and northern regions. Asking rents are up 4% in the South West and up at least 3% in the North East (+3.3%), North West (+3.1%) and Yorkshire & the Humber (+3.0%). The trend we reported last quarter of London rents weakening has continued over the past three months, with prices now 3% lower than Q3 2019 in the capital, down 6.8% in Inner London and up just 0.8% in Outer London.

 

Shift from studios

In September last year the most in demand property type was a studio flat, followed by a two bedroom house. This September, not only have two bedroom houses overtaken studio flats as the most in demand, studio flats have fallen seven places, behind bungalows and houses as renters look for spare rooms to set up spaces to work from home.

 

 

Rank

Most in demand property type

September 2020

Most in demand property type

September 2019

1 Two bedroom house Studio flat
2 Two bedroom bungalow Two bedroom house
3 Three bedroom house One bedroom house
4 Three bedroom bungalow One bedroom flat
5 One bedroom house Three bedroom house
6 Four bedroom house Two bedroom bungalow
7 One bedroom flat Two bedroom flat
8 Studio flat Three bedroom bungalow
9 Two bedroom flat Four bedroom house
10 Five bedroom house Three bedroom flat

 

 

 

 

 

 

 

 

 

 

 

More available stock in London drives rents down

Prospective tenants will find 20% more properties in total than in September last year nationally, but available stock is only up by 2% so they will still find strong competition, especially for houses. It is a different story in the capital, where available stock is up by 80% on last September.

 

Available stock of the most in demand property type, two bedroom houses, is down 46% outside London and up just 2% in London. There are now 11% more studio flats available outside London, while in the capital, available stock of studio flats has doubled, up 100%.

 

Asking rents have been falling since the beginning of lockdown in London, and are now an average of £110 per month lower than back on 23rd March at the start of lockdown. Looking at property types in London, asking rents of studio flats are 3.5% lower than this time last year, one bedroom flats are down by 3%, and two bedroom flats are down 4%. Two bedroom houses are faring better, up by 0.7%.

 

Rightmove’s Commercial Director and Housing Market Analyst Miles Shipside said: “Landlords with a large portfolio of studio flats may find they need to accept lower rents than over the past few years, although let’s not forget that overall rents have gone up by £100 per month outside London and £140 in the capital over the past five years so those with a longer term view will still be able to make some good returns. It will be the accidental landlords that have one property that need a good agent more than ever, to promote the attractive attributes of their buy-to-lets. I’ve heard from some agents that they’re now advising their landlords to turn part of the living room into a work from home space, or offering to install high-speed broadband for tenants as an added incentive. The rise in demand for properties that have more space and that typically have higher rents is helping push up average rents to new record highs.”

 

Agent’s view

Michael Cook, National Lettings MD at LRG, comments: “We’ve moved more customers this September than any month previously, which is largely due to pent-up demand from tenants. As some of the restrictions imposed during the pandemic began to lift, there was a documented surge in enquiries from renters who were restricted from moving over the spring. Changes to stamp duty also saw some investors take advantage of reduced acquisition costs of new properties and an increase in buy-to-let purchases. However, we’re still seeing a gap in supply and demand and the need for more homes – many thousands more homes in the Private Rented Sector – is clear. At the same time, COVID has changed tenant priorities, with many now wanting bigger homes with gardens and a separate space to work in, and this now comes at a premium. Demand for rental stock outside of London has outpaced that shown in the capital with a requirement for more home working space and gardens and a reduction in the need to be in such close proximately to the office, with more flexible homeworking being offered by employers. We’ve also seen houses increase in demand over flats with people looking to rent properties for longer, increasing average tenancy lengths.”

Rightmove

UK Property news updates shared directly from Rightmove PLC - the country's leading property portal.

You May Also Enjoy

Overseas Property

Exploring Homes for Sale in Spain: A Guide for International Buyers

Spain has long been a top destination for international buyers looking to invest in real estate. Its combination of sunny beaches, rich culture, delicious cuisine, and vibrant cities makes it a favorite for those seeking both a holiday retreat and a valuable investment. With a growing market and diverse options, homes for sale in Spain…
Read More
Home and Living

10 Tips for Moving Home

Moving home is an exciting yet challenging experience, requiring careful planning and organization. The moving process can be stressful if not handled properly, from sorting belongings to managing time. These 10 tips aim to make your move smooth and stress-free, helping you easily settle into your new space. 1. Start Planning Early The earlier you…
Read More
Breaking News

A third of UK homes for sale are ‘chain-free’ reports Zoopla

Recent tax changes and incoming council tax premiums for second homes have unsettled property investors and second homeowners with some now looking to sell One week on from the Autumn budget, buyer enquiries for homes that are chain-free are 33 per cent higher compared to those not advertised as chain-free 41 per cent of two…
Read More
Love or Hate Rightmove
Breaking News

Rightmove’s weekly mortgage tracker 06/11/24

The average 5-year fixed mortgage rate is now 4.66%, down from 5.33% a year ago The average 2-year fixed mortgage rate is now 4.92%, down from 5.76% a year ago The average 85% LTV 5-year fixed mortgage rate is now 4.69%, down from 5.40% a year ago The average 60% LTV 5-year fixed mortgage rate is now 4.05%, down from 4.91% a year ago The average monthly mortgage payment on a…
Read More
Overseas Property

Top reasons to consider buying a luxury villa in Phuket Thailand

Those who have worked hard for many years are often looking for ways to invest their cash so that they can enjoy life to the max in their advancing years. Some might decide to dabble in the stock market or insurance policies to enhance their savings, while others might look to purchase something more physical…
Read More
How to add value to your home
Estate Agent Talk

5 Top Tips for Running a Business From Home

Have you ever wanted to start and run your own business from home? Although it’s an incredibly rewarding experience, it can be tough to set up and know where to start, especially if you have no business experience or background! Whether you want to run a small business, or have grand ambitions for eventual expansion,…
Read More