Rental Market Update: Rent Prices and Tenant Preferences Across the UK

The UK rental market continues to evolve in 2024, with some significant shifts compared to the record highs of recent years.

Here's a comprehensive breakdown of current trends in rent prices, tenant preferences, and what renters can expect moving forward.

Rent Price Trends:

• Moderation: While rent prices are still rising, the dramatic growth seen in 2022 and early 2023 has begun to slow.

  The Office for National Statistics (ONS) reports an average increase of 8.7% in the 12 months to May 2024, down from a peak of 9.2% in March [ONS private rent and house prices].

  This suggests a more balanced market emerging.

• Regional Variations: Rent growth continues to vary across the UK. London remains the most expensive region, with average rents exceeding £1,300 per month.

  However, the increase there (10.1%) is lower than the national average [ONS private rent and house prices].

  Conversely, Scotland and some parts of Northern England continue to see higher growth rates.

Shifting Tenant Preferences:

• Affordability Concerns: With rising rents and a cost-of-living squeeze, affordability is a top priority for many tenants.

  This is leading to a rise in demand for smaller properties and those in more affordable locations.

• Increased Demand for Outdoor Space: The pandemic's emphasis on spending time outdoors has translated into tenant preferences.

  Properties with balconies, gardens, or access to green spaces are in higher demand.

• Focus on Amenity-Rich Properties: Modern developments with amenities like gyms, co-working spaces, and concierge services are attracting renters, particularly young professionals.

Looking Ahead:

• Continued Growth, But at a Slower Pace: Experts predict rental prices will continue to rise in 2024, but at a much slower rate compared to recent years.

  Forecasts suggest an average increase of around 2-3%.

• Increased Supply: A gradual rise in rental properties coming onto the market could further ease upward pressure on rents.

  Build-to-rent developments and a potential slowdown in the sales market may contribute to this increase in supply.

• Tenant Scrutiny: As affordability becomes a bigger concern, tenants are likely to be more selective.

  Landlords who offer competitive rents, well-maintained properties, and desirable amenities will be in a stronger position to attract and retain tenants.

Tips for Tenants:

• Be Prepared to Move Quickly: Competition for desirable properties remains high. Have your references and finances in order to act fast when you find the right place.

• Consider Location: Think strategically about location. While convenient central locations are attractive, you might find better value for money in slightly less central areas with good transport links.

• Negotiate Rent: Don't be afraid to negotiate rent, especially if the property has been vacant for a while or there's room for improvement.

Tips for Landlords:

• Offer Competitive Rents: While you want to achieve a good return on your investment, setting a realistic rent will attract more interest and reduce void periods.

• Maintain Your Property: Regular maintenance and improvements can make your property stand out and attract higher quality tenants.

• Consider Offering Incentives: Short-term rent reductions or incentives like free parking or gym memberships can entice tenants, especially in a competitive market.

The UK rental market continues to adapt to changing economic conditions and tenant preferences.

By staying informed and adjusting their strategies, both tenants and landlords can navigate the current landscape and make informed decisions.