2024 Rental Housing Trends: A Shift Towards Long-Term Renting in UK Cities

The latest 2024 Rental Housing Trends Report by MRI Software has revealed some fascinating insights into the UK rental market. As housing prices soar and the cost-of-living crisis deepens, renters’ preferences and behaviours are evolving, signalling important shifts for landlords and property investors.

One of the most striking trends is the return of renters to city living. In 2024, 33% of renters expressed a preference for living in urban areas, up from 25% in 2022, indicating a waning desire for rural life post-pandemic. With housing affordability becoming an increasing challenge, homeownership is slipping out of reach for many – a situation that now affects a third of UK renters, compared to just a fifth two years ago.

Rising Affordability Issues

Affordability continues to be a key issue. The report found that 80% of renters now cite financial constraints as the main reason for not pursuing homeownership, up from previous years. This is especially pronounced among those over 55, signalling a shift towards long-term renting across all age groups.

For the North-South divide, the disparity in rent prices remains stark. Renters in the South are paying £600-£900 more per month than those in the North. In the South, average monthly rents range between £1,000-£1,500, while in the North, renters typically pay between £400-£600. These financial pressures are shaping housing decisions, with many renters gravitating towards more affordable northern regions.

Digital Solutions Lagging Behind

While 60% of renters value the option to manage communications with landlords digitally, the uptake of resident portals remains low – only 8% of renters use these platforms to report maintenance issues, and less than 2% use them for direct communication with landlords. This presents a significant opportunity for landlords to improve the tenant experience through better digital integration.

Sustainability: A Growing Priority

Sustainability is becoming increasingly important, especially for younger renters. However, renters are primarily focused on green initiatives that lead to cost savings, such as energy-efficient insulation and renewable energy systems. This highlights a growing opportunity for landlords and property managers to focus on energy efficiency as a way to attract and retain tenants while improving operational costs.

City Living on the Rise

The report also revealed a clear preference for city living, especially among younger renters. With the post-pandemic shift back to office-based work and the convenience of urban amenities, more renters are choosing to live in cities. This is an important insight for property investors, highlighting the growing demand for build-to-rent developments in urban centres.

Dan Foryszewski, Director for Residential Investor Solutions at MRI Software, stated, "Affordability and financial pressures are pushing homeownership further out of reach for many. Today, 80% of renters feel priced out of the market, and a growing number are choosing to rent long-term. The need for affordable housing solutions has never been greater."

Opportunities for Landlords and Investors

The 2024 Rental Housing Trends Report provides key insights for property developers and landlords. As demand for affordable rental properties continues to rise, especially in urban areas, the market presents an excellent opportunity for investors. Focusing on build-to-rent developments, sustainability, and digital integration will be key to staying competitive in the evolving UK rental market.

Stay ahead of the market and consider the growing demand for city-centre rental properties as a key investment opportunity in 2024.