UK rental market sees gradual easing in demand, yet remains above five-year average
The UK rental market is experiencing a gradual easing in demand, marking a shift from the peak levels witnessed in recent years. Despite the easing, demand remains 32% above the five-year average, with continued competition in the market expected to support rental growth in 2024.
Commenting on the data, Nicky Stevenson, Managing Director of premium estate agency, Fine & Country, says that in October of last year, UK rental growth reached 9.7%, outpacing earnings growth at 7.9%. She adds, “This growth, although still significant, is slightly slower compared to the 11.9% seen during the same period in 2022. Rental demand has decreased by 11% from the unprecedented levels of the previous year but continues to outpace historical averages.”
According to Rightmove, there are signs of improvement in the supply-demand imbalance, with demand easing and available supply up 14% compared to 2022. However, the market remains highly competitive, with the number of enquiries for each property more than tripling from eight in 2019 to 25 presently.
Stevenson comments on the current dynamics in the rental market: “The market is gradually evolving, and while demand is easing, competition remains fierce. Renters are having to adapt their strategies, being more flexible with schedules and preferences, and being prepared to swiftly undergo referencing to enhance their chances of securing a property in this competitive landscape.”
Looking ahead, Stevenson notes that while rents are forecast to continue to rise steadily, we are past the peak growth, with evidence indicating a cooling in tenant demand in the face of weakening affordability. Although slowing, rental growth is forecast to average 3.6% over the next five years. London is anticipated to lead this slowdown, with rents predicted to rise by just 2% next year in the capital.
Increasing regulation and higher mortgage rates will continue to impact new investment in the rental market, maintaining the continued supply demand imbalance and keeping the slowdown in rental growth in check. In the prime market, average rents have reached £3,852, reflecting a 5.6% year-on-year increase. Rental growth in the prime markets is above 2% in all regions, with South West leading the pack with 19% year-on-year growth.
Stevenson adds, “The prime market is robust, with rents continuing to rise. However, challenges such as increasing regulation and higher mortgage rates are expected to influence the market dynamics, ensuring a controlled slowdown in rental growth.”
Fine & Country specialises in the sale and rental of prime residential properties, operating in over 300 locations worldwide. Fine & Country has won Best Estate Agency Marketing and Best International Estate Agency Marketing seven times in the past 10 years at the International Property Awards
Countdown Begins: London Proptech Show 2024 Sets Stage for Transforming Real Estate Industry
Press Release London January – Anticipation mounts as we edge closer to the long-awaited London Proptech Show 2024, which is mere 6-weeks away. This global event is set to unfold on February 27-28, 2024, at the prestigious ExCeL London, uniting an illustrious lineup of industry experts, pioneering startups, and investors from diverse corners of the world. Be part of this unparalleled platform where the cutting-edge advancements in proptech solutions will be discussed and displayed.
Exploring pivotal themes such as AI, big data, smart solutions, logistics, construction technology, the event will feature riveting keynote speeches, insightful panel discussions, and engaging Q&A sessions.
Among an impressive lineup of industry luminaries who will be present on the show, some of the important speakers include:
Rachel Maclean, Minister of State at the Department for Levelling Up, Housing, and Communities | Mark Zwerner, Vice President of Global Strategic Partnerships at ABB’s Smart Buildings Division | Andrew Knight, Global Data & Tech Lead, RICS | Fiona Cousins, President-Elect, The Chartered Institution of Building Services Engineers (CIBSE) | Simon McWhirter, Deputy Chief Executive & Director of External Affairs, UK Green Building Council |
Benjamin O’Connor, Director, New London Architecture (NLA) | Teodora Kaneva, Head of Smart Infrastructure and Systems, TechUk | Randal L. Froebelius, Chair & Chief elected Officer, BOMA | Melanie Leech, Chief Executive, British Property Federation | Hugo Santos Ferreira, President, APPII – Portuguese Association of Real Estate Developers and Investors | Brendan Geraghty, CEO, UKAA |
Ben Beadle, Chief Executive, National Residential Landlords Association (NRLA) | Lars Sommerer, Managing Director, SwissPropTech | George Dobbins, Co-Founder, The Built Environment Technology Association (BETA) | Björn-Martin Kurzrock, President, European Real Estate Society (ERES) | Andrew Bulmer, CEO, The Property Institute | Damien D. Nouvel, Associate Professor of Real Estate & Urban Economics, ESPI Real Estate Business School. Click to check the whole list
With multitude of exhibitors showcasing cutting-edge proptech solutions, companies like Brightchecker, Lobo Studio, Propcall, Quidos, Street, Mobiess, Sitedesk, Ergos, Propworx, Nidus, Flamemgo, Property Watch and others will be at the event, offering a glimpse into the industry’s future.
The London Proptech Show is poised to offer unparalleled networking, business matchmaking opportunities, and invaluable insights. Attendees can connect with industry experts and peers who are spearheading proptech’s evolution.
“Creating a space for industry leaders and innovators, the 2nd Annual London Proptech Show stands as a beacon of progress in real estate. Our aim is to tackle existing challenges while nurturing fresh prospects and sustainable solutions in the sector,” said Shariq Abdul Hai, CEO at Valiant Business Media, while talking about the importance of the event. “Join us as we foster collaboration, inspire innovation, and pave the way for the industry’s evolution,” he further added.
Andrew Stanton is the founder and CEO of Proptech-PR, a consultancy for Founders of Proptechs looking to grow and exit, using his influence from decades of industry experience. Separately he is a consultant to some of the biggest names in global real estate, advising on sales and acquisitions, market positioning, and operations. He is also the founder and editor of Proptech-X Proptech & Property News, where his insights, connections and detailed analysis and commentary on proptech and real estate are second to none.