UK rent prices have increased by 3.0% in the last year but dropped by 9.4% in London, according to the latest UK Rental Market Report from Hometrack.
The report states that there is strong rental demand amid constrained supply across the UK outside of London. The North East, South West, East Midlands and Wales have seen the highest rental growth since March 2011.
Hometrack predicts there will be an increase in demand for rental homes in city centres as offices start to reopen.
Terry Mason, Group Operations Director at the UK’s largest rental guarantor service, Housing Hand, comments: “We’ve seen renters in London and other cities head to the suburbs in search of cheaper property while working from home. Many tenants simply waited until their current contract ran out and then headed out of the city centre to save money. Others moved back in with their parents while working from home, making huge savings.
“A few companies have saved money too. Let’s say a typical office desk costs around £750 per month. That’s £15,000 per month for a 20-person team. A company that reduces its requirement to 10 desks can add £90,000 per year straight to its bottom line. While those with long leases don’t have much room for manoeuvre, businesses using flexible office space have gained enormously.
“Of course, if staff are less productive working at home, then those gains are reduced. Some staff are more productive at home; others in the office. Many companies, however, still favour those who are able and willing to work in an office environment.
“As such, it makes sense that demand for rental homes in city centres is likely to pick up once more. Rents now being so much cheaper in many central locations, following the past year of reduced demand, is likely to feed into this too. Tenants can save quite substantially compared to what they were paying pre-pandemic, as we see highlighted by the 9.4% drop in rents in London. I believe all of this points to an uptick in demand, which we will see play out over the remainder of this year and into 2022.”
Read Hometrack’s full report here: www.hometrack.com/uk/insight/rental-market-report/q1-2021-rental-market-report/