UK Rental Market Surge: 28% Increase since 2020 A Positive for UK Real Estate Investors

In a recent analysis by Goodlord, the Rental Index for March 2024 reveals a staggering 28% increase in rental costs compared to March 2020, signalling significant growth in the UK rental market.

Despite month-on-month fluctuations, with March seeing a marginal decrease of £2 in average rents compared to February, the demand for rental properties remains robust, keeping void periods unchanged at 18 days on average.

The year-on-year comparison paints a vivid picture of the rental market's evolution, with rents in March 2024 soaring by 6.4% compared to the same period last year. In March 2020, amidst the onset of the pandemic, tenants were paying an average of £909 per property, which has since surged to £1,160 across England.

While the pace of rental increases has moderated since the peak in 2022, the trend continues to ascend steadily. Notably, regions like the West Midlands and Greater London have experienced modest increases in rental costs, with Greater London boasting the highest average rent at £1,954, while the North East offers the lowest at £851.

Voids were unchanged month-on-month, with the number of days a property is vacant in between tenancies holding at 18 days. This is the same void average recorded last year, in March 2023.

William Reeve, CEO of Goodlord, emphasizes the remarkable trajectory of rental prices, which have consistently outpaced inflation since the pandemic's onset. He attributes this surge to the intersection of a burgeoning tenant population, limited housing stock, and various challenges faced by landlords in the current market landscape.

As the rental market continues to flourish, investors eyeing UK real estate can find promising opportunities for long-term growth and steady returns. With rental demand remaining resilient and rents on an upward trajectory, now is an opportune time for investors to capitalize on the lucrative prospects offered by the UK rental market.