Increased demand for quality rental properties sees asking rents rise 7% in three years
Growing demand for private rental sector (PRS) properties has seen asking rents increase by 6.9% in the last three years as the need for quality rented homes soars.
According to the latest data from the Office for National Statistics, PRS asking rents rose an average of 1% in 2018.
Although the overall UK outlook for rental growth in the last 12 months has been relatively slow, on a national level, lower growth in Scotland at 0.6% has stunted combined figures whereby growth in England stood at 1.1%.
Meanwhile, on a regional level, months of decline in London paved way to a small 0.2% rise – the first increase since March 2018, compared to high-growth regions including the East Midlands (2.5% growth) and Yorkshire and the Humber (1.8%).
Asking rents outside of London grew by 1.4%.
Increasing, rental asking prices have been supported by a sustained surge in demand for private rented properties, particularly within thriving urban hubs where populations have boomed over the last decade.
In 2007, just 2.8 million households paid rent to a landlord. Ten years later and that figure had increased by 63% to 4.5 million.
Generation Rent makes up the highest proportion of renters in terms of age groups, with these 25-34-year-old’s accounting for 35% of the market. However, the number of older households entering the private rental sector has also increased in the last twelve years from around 11% to 16%.
Interestingly, those within the 16 to 24 bracket have dropped off from 17% to 12%, potentially as a result of increasing rents and a growing tendency to live at home for a longer period of time.
Strong demand in thriving urban centres such as Manchester, Bristol and Liverpool have also seen an influx of investment into purpose-built, build-to-rent schemes affording a greater, long-term comfortable and luxury living for rental tenants.