Zoopla has revealed that rental growth has slowed to its lowest level in over two years. But, while rents aren’t rising as fast as they were, they’re still on the up. The average UK rent is now a hefty £1,232 per month, a £66 increase compared to last year. But the rate of growth is slowing down significantly.
Where Are Rents Falling?
Some major cities have actually seen rent decreases in the first half of 2024. Nottingham, London, Brighton and Glasgow all saw a slight dip in rents. This is partly because rents had gotten so high that they’ve reached a plateau in some areas.
Where Are Rents Still Climbing?
However, in many areas, particularly more affordable markets close to big cities, rents are still on the rise. Places like Rochdale, Doncaster, Southend and Sunderland have all seen rent increases of over 4% this year.
What’s Happening In London?
London is a mixed bag. Inner-city areas like Tower Hamlets, Newham and Greenwich have seen falling rents, but outer London is still seeing above-average growth. This is likely because outer boroughs offer a more affordable option for those seeking to escape the higher rents in the city center.
More Homes On The Market, But Not Enough
More homes are becoming available for rent, but the number is still much lower than before the pandemic. Lower mortgage rates are making it easier for some people to buy a home, while corporate landlords are buying more properties to rent out. However, some private landlords are selling off their rental properties due to the changing market, which is keeping the overall supply low.
The Experts’ Take
Richard Donnell, at Zoopla, says this slowdown in rental growth is good news for renters. He expects rents to rise by 3-4% this year, which is less than half the rate seen last year and below the rate of wage growth, offering some relief for those struggling to keep up.
The Bottom Line
While the market is cooling down, don’t expect a sudden drop in rents. It’s a good time for landlords to take stock of the market and adjust their strategies. And for renters, keep an eye on the market, compare prices, and negotiate if possible. The days of skyrocketing rents may be behind us, but the rental market is still evolving.