According to the most recent data, the UK rental market is seeing an inflation slowdown.
Managing Director of Fine & Country Nicky Stevenson comments: “Rental growth has moderated to +7.5%, a decrease from +9.8% recorded a year ago. The cooling trend in rental inflation is evident across the UK, with London witnessing the most substantial deceleration.
“Despite a slight uptick of 0.9% in rents in March, based on Hometrack data, rental demand has diminished by a fifth over the past year. Contributing factors include the waning effects of the pandemic, a slowdown in the labour market, and enticing lower mortgage rates for first-time buyers, as reported by Zoopla.”
While this may seem negative, the demand-supply imbalance is still significant, which indicates rental prices should sustain their current upward trajectory. Still, rental supply is rising, growing by 29%, according to the latest Propertymark Housing Insight Report. This suggests buyer activity is increasing among buy-to-let investors, indicating that the UK property market has turned the corner following a difficult 2023.
Stevenson points out a reduction in void periods during February 2024, falling from 22 days to 18 days. Every UK region apart from the South West saw shorter void periods, according to Goodlord.
With rental prices growing by 29%, many properties are slipping into higher price brackets. Zoopla data reveals that 51% of all UK rental properties are found in areas where the average rent surpasses £1,000 per month. The RWinvest team have put together a guide on where to invest money to get a monthly income, which our readers should find useful.
Find Out More: Check out our guide on the running costs of a buy-to-let to help improve your property business plan.
