The UK’s two-speed rental market is now entrenched as the nation enters its second national COVID-19 lockdown.
UK rents outside London are up +1.7% annually to £744 ($977) per calendar month, whereas in London they are down significantly (-5.2% annually) to £1,596, according to new data from rental website Zoopla.
An average single UK renter now spends 31% of their salary on rent, and the average time to let a property is 17 days.
The general growth in rents is due to demand outstripping supply across cities outside London, with demand from tenants up 20% year-on-year UK-wide, and supply into the rental market flat year-on-year by way of contrast.
Key reasons for the imbalance between supply and demand include a squeeze in squeeze on mortgage lending means more people staying in the rental sector when they may otherwise have bought.
In September Zoopla published data which showed that the share of homes purchased by first-time buyers in the UK has fallen for the first time in five years. This followed a 10-year high in the share of sales to first-time buyers recorded in 2019.
Another reason for this is that lockdowns and other restrictions are meaning people are reassessing their lifestyle priorities, encouraging more moves.
The return of students to university as usual in the Autumn will also have boosted demand in the rental sector.
Rents are growing in the majority of the cities monitored by Zoopla. Leading the way in England is Newcastle (+3.5% annually); Bristol (+3.1%) and Sheffield (+2.6%).
However, rents are falling in some cities like Coventry (-2.5% annually) and Reading (-1.8% annually) as some cities feel the impact of office workers continuing to work from home.
The data show that the search for space driven by the pandemic means houses are letting more quickly than flats in all regions (apart from the North West); the average time to rent a house is now 16 days, whereas it takes 18 days on average to let a flat.
Gardens, Parking, Garage and Balcony are the most popular search terms for rental property. The fifth most popular search term is pets.
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