Across the country, the pandemic has influenced rental demand and opportunities, resulting in record-high figures for the rental market. The market conditions are set to be favourable with rental prices rising and demand in urban areas increasing.
So, what does this mean for landlords and tenants in 2022?
Demand and Supply Changes
House prices have risen dramatically in the last two years, with the average property costing £24,000* more than it did a year ago, making it more difficult for buyers to step onto the property ladder. This has forced many first-time buyers to stay in rental accommodation for longer.
Based on a five-year average, Zoopla reported that demand for rental homes has climbed by 43% while supply has decreased by the same amount. This is expected to further increase rent prices across the UK thanks to fluctuating movement patterns and remote working.
In turn, rental costs in the UK climbed by 8.6** from November 2020-21. ** Despite this, Zoopla’s recent market report, affordability remains the same, with rent accounting for 37% of a tenant’s salary.
Will rental prices continue to rise?
Rental price increase reached a 13-year high in Q3 2021***, due to a combination of rising demand and landlords exiting the buy-to-let sector. Rent prices have now exceeded pre-pandemic levels and the continuing gap between supply and demand is set to push rent values up even further in 2022.
Average rent prices are expected to climb by another 4.5%** across the country and in some areas of the country, rents could even rise above earnings.
The good news is that now is a great time for landlords to invest in high quality homes, while easing pressure on the rental market too, which is a win-win for both landlords and tenants.
Want to take advantage of the 2022 rental market? Book a valuation with one of our property experts.
*Property Data – house price growth stats
** Zoopla rental market forecast
***According to the Simply Business Covid19 impact report