According to Zoopla, rental affordability was improved between 2016 and 2021, with rental costs increasing by 4% during that period. This was because of weaker demand after Brexit and lower mortgage rates, which allowed for more new homeowners. This led to a hardier supply of available rental properties.
But currently, the market is experiencing an undersupply, driven by very high demand, little increase in new supply of available properties, and high mortgage rates dissuading first-time buyers.
These factors have led to rapid rental growth, which is outpacing inflation. Unless the UK receives a significant sudden supply boost of available rental properties, it is likely that growing rental costs will continue. Those investing to make money from property will most likely keep a keen eye on this persistent rental growth.