Tenants across the UK are now valuing their commute to work more than ever, causing rents in popular commuting cities like Birmingham, Chester, Cobham, and Weybridge to rise. This trend is based on the latest findings from property giant Savills, which highlight how the return to office work is reshaping the rental market.

During the initial phases of the COVID-19 pandemic, many sought refuge in the countryside and coastal areas, seeking more space as remote work became the norm. However, as life returns to a semblance of normality and offices reopen, the ease of commuting has surged back to the top of tenants’ priority lists. Savills’ data from the first quarter of the year points to this trend, showing significant rental growth in areas known for their commuter-friendly credentials.

Spotlight on Growth Areas

• Chester leads the pack with a rental increase of 3.9% in the past three months.
• Birmingham follows, with rents rising by 3%.
• Cobham and Weybridge, nestled within the commuter belt, have seen increases of up to 2%.

These areas combine the allure of the countryside with the convenience of city amenities and robust transport links—Weybridge, for example, offers train services to central London in under 30 minutes.

Urban vs. Rural – A Comparative Growth

Savills reports that urban areas, especially regional towns and cities, have outpaced their rural counterparts with an 8.2% year-on-year growth compared to just 2.3% in more secluded regions. The commuter belt around London is experiencing a similar trend, with built-up areas witnessing a 3.9% growth against a 1.5% increase in more rural locales.

Despite a slight rise in available rental properties in popular commuting zones, this hasn’t led to cheaper rents. Harriet Scanlan from Antony Roberts, a Richmond-based estate agency, notes an increase in property viewings but no dip in rental prices. This scenario underscores a continuing demand-supply imbalance, keeping rental prices firm.

The Capital’s Rental Market Dynamics

Interestingly, central London’s high-end rental market hasn’t mirrored the growth seen in commuter towns, with a modest 0.3% increase in the first quarter. This slow growth is attributed to the market adjusting back to pre-pandemic seasonal patterns, leading to a cumulative 0.9% increase over three months and a 4% annual growth rate. However, rents remain 18% higher than pre-pandemic levels, highlighting a lasting impact on the rental landscape.

Jessica Tomlinson of Savills covers the broader implications, “Rental growth picked up slightly on the quarter, however, affordability pressures and increased stock mean rental growth has settled at a much lower level compared with the last three years. But rents remain at a record high, and the prospect of falling mortgage rates is expected to ease some of the financial burden on landlords. Rental growth continues to exceed capital value growth, meaning that yields have improved across the sector, which will support continued investment. In London, houses are now outperforming flats, signalling that the flats market maybe hitting an affordability ceiling, while tenants searching for houses typically have slightly more leeway when it comes to budget. Also, a stronger sales market has constrained the number of houses to rent across the capital, particularly across west and north west London.”

The shift towards preferring houses over flats in London, driven by affordability issues and a constrained supply, particularly in the west and northwest parts of the city, suggests a nuanced rental market evolution. This trend underscores the complexities of post-pandemic recovery, balancing new work patterns, lifestyle preferences, and the ever-present affordability concerns.