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Demand for rental property is up and rents continue to increase – but not in city centres.
City centre landlords are seeing ‘a flood of properties coming into the market’ and falling asking rents, the property portal Rightmove has reported in its quarterly rental trends tracker.
‘The price premium that many tenants are usually willing to pay to have the vibrancy of a city centre on their doorstep has been tempered for now’, said Rightmove Director of Property Data Tim Bannister.
‘There’s no doubt that higher rents will return once life goes back to some form of normality, but it will be the city centre properties with gardens and balconies that will be able to command the biggest premiums’.
Outside city centres it is a very different picture, said Bannister. Agents are reporting extremely busy markets and rising rents, he said.
‘Available stock is lower than the usual level we would see at this time of year, and demand is higher, leading to a much better outlook for those landlords in the suburbs and in smaller towns and villages’.
In all 10 of the cities looked at in the tracker there had been an increase in the number of tenants enquiring about properties outside that city. The biggest increases were logged in Inner London, where 53 per cent of renters made such an enquiry, and in Edinburgh, where 45 per cent asked.
With more tenants looking to move to the suburbs and beyond, and some short-term lets changing to long-term lets, there has been a significant increase in the number of properties available for rent in city centres, said Rightmove.
In five of the cities looked at, the number of available properties was at least double the number available this time last year. ‘This is very different to the national picture where available stock is down by 9 per cent compared to this time last year’.
Asking rents were still rising in Bristol and Liverpool, both up 2 per cent compared to a national average increase of 3.7 per cent.
But in London asking rents started to fall in the third quarter of 2020 and continued to fall in the fourth quarter, when they were 6.4 per cent lower than the same quarter of 2019. In Inner London they were down by 12.4 per cent.
The number of prospective tenants contacting agents nationally is currently up by 27 per cent on January last year, said Rightmove. Asking rents outside London are at a new record of £972 per calendar month, up by 3.7 per cent annually. ‘This is also the first time since we started recording this data back in 2011 that asking rents have increased in the fourth quarter of a calendar year.