UK Rental Market Trends 2024: Key Insights from the Last 6 Months
Rising rents, evolving tenant preferences, and new regulations—there’s a growing noise in the UK rental market that’s making it hard to keep up. Whether you’re a landlord trying to stay ahead of the game or a tenant keeping an eye on the latest rent prices, we’ve got you sorted. This blog looks at the key insights from the past six months that are shaping the UK rental market in 2024.
What is happening in the UK rental market?
There’s a lot to unpack so let’s jump right in! Here’s all you need to know about the UK rental market:
Rent Prices
As of August 2024, there’s a steady 7% increase in rental costs with the average rent hitting £1,445 monthly. Demand continues to increase while the supply of rentals is staggering one-third below pre-pandemic levels, causing a constant rise in rents in the UK.
Vacancy Rates
But don’t worry, we’ve got some good news too! Vacancy rates in Yorkshire and the North East are now at a low 6.37%. This means strong rental demand and a boost in rental values for landlords. As for tenants, this translates to higher rents, but on the plus side, they can expect well-maintained rental properties in Yorkshire and the North East.
Rental Yields
The average rental yield in the UK currently ranges between 5% and 8%. Landlords focusing on areas such as Leeds and Manchester, where yields fall within this range, might see better returns on their investments. Whereas, renters might face higher rents in these high-yield areas, so looking for properties in areas with lower yields might be a cost-saving strategy.
What are the new rules for landlords in the UK in 2024?
Now you know let’s dive into the legal side of things. 2023 stirred up quite a buzz in the rental market, setting the stage for major changes in 2024. A few of which we’ll be tapping into below:
The Renters’ Reform Bill
First, on the list, we have the “The Renters’ Reform Bill,” introduced as a means to support private renters. This bill brought about a huge shift in the UK rental market. For instance, the removal of ‘no fault’ evictions—landlords will now need a legitimate reason to evict tenants.
Assured Shorthold Tenancies (ASTs) will now be replaced with flexible, open-ended agreements. Landlords will also need to lay out clear tenancy terms before the lease starts and consider pet requests. Additionally, rent hikes will now be limited to once a year.
But that’s not all! Landlords must join the new digital ‘Property Portal’ underway supported by the ‘Private Rented Sector Database.’ This platform will let tenants access important information about their landlords, including the properties they own and their track record.
Warm Homes Programme
Did you know we’re only 6 years away from the United Nations Sustainability Development Goals (SDGs) deadline in 2030? No wonder the UK government thought it was high time to introduce the ‘Warm Homes Programme.’ It compels landlords to ensure their properties have at least a ‘C’ rating on the Energy Performance Certificate (EPC) by installing improved insulation, double-glazed windows, and energy-efficient appliances. While these updates might seem like a big investment, landlords can attract eco-conscious tenants, boost rental yields, and lower vacancy rates.
Capital Gains Tax
With residential property taxes already ranging from 18% to 24%, a further increase in Capital Gains Tax rates is expected. Making owning rental properties more expensive, and leaving landlords with no other choice but to either sell their rentals or increase rents. Adding fuel to the fire for tenants looking for affordable housing or keeping up with their current rent.
What Are Tenants Looking For in a Rental Property in 2024?
With fast-paced changes in the UK rental market, staying on top of trends has become more important than ever for landlords. So, what are tenants looking for in 2024? Let’s find out:
Virtual viewings, reviews and social media: Virtual viewings are now a go-to for tenants, with property management agencies like Rightmove showcasing spaces through videos and images. Alongside online ratings and reviews on websites and social media.
Smart home features and technology: Features like smart thermostats, controlled lighting, and remote security systems are becoming popular among tenants. And the use of digital rent management platforms has made life easier for both tenants and landlords.
Work-from-home-friendly spaces: With more people working from home (WFH), there’s a growing demand for properties with WFH-friendly spaces for instance noise-proof home offices and study rooms.
Demand for suburban and rural rentals: Many renters are now seeking more for spacious homes with green spaces, boosting demand in suburban and rural areas. Notably, 34% of renters in London and 52% of renters in Leeds are exploring options beyond the city limits.
Pet-friendly rentals: Thanks to the Renters’ Reform Bill, tenants are seeking more pet-friendly spaces. So if you’re looking for ways to attract more tenants, allowing pets is your answer.
Sustainable living: Environmental awareness and rising energy costs are driving tenants to seek out properties that offer energy-efficient and eco-friendly features. Landlords going green will not only draw in more tenants but also make it easier for sustainability-conscious to find their ideal eco-friendly home.
Longer tenancy agreements: With a shortage of rentals and rising rents, tenants are opting for longer leases, averaging two and a half years. For landlords, this means a steady income and lower vacancy rates, though it can be tricky if tenant issues arise. On the flip side, fewer available rentals make it tougher for tenants to find properties.
To summarise, the UK rental market is changing rapidly, showcasing rising rents and evolving trends like virtual viewings, smart home features, and sustainable living. By understanding and responding to these changes, both landlords and tenants can make strategic decisions to navigate the current landscape effectively.
Consider Pink Elephant
Phew! That’s a lot to take in, right? Why not make things easier and leave it to Pink Elephant. Whether you’re a landlord or a renter, we’ll take care of all your property needs from ‘deal to deed’ in accordance with the latest changes and trends.
FAQs
Which part of the UK has the cheapest rent?
The cheapest region to rent a home in the UK is the North East with an average monthly rent of £715.
What is the average rent price in London?
London rental prices range from £1,565 to over £3,200 per month.
What is the cheapest area to live in Bradford?
The cheapest and most affordable areas in Bradford include Eccleshill, Undercliffe, and Buttershaw.
What is standard rent in the UK?
Currently, the average rent UK is £1,223 per month