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Headline news from Q1 2024

Rents in Manchester increased by 9.6% in the year to January 2024, outperforming the UK average of 7.8%. While still a significant rise, a 7.8% average for the UK is the lowest level over the past 2 years with above 11% increases being seen just a year ago. Zoopla suggests that this is a result of affordability pressures on renters, rather than a big boost in supply. London has seen the sharpest reduction in rental inflation, having been at 15% in January 2023 but now down to 5.1% in January 2024, putting London at the bottom of the table for Great Britain. With Manchester’s rents increasing by 9.6%, the city is 3rd highest in England, after Newcastle & Southampton. The North West region saw the second highest increase in rents at 9.8%, with just the North East slightly higher at 9.9%.

While there hasn’t been any major expansion in rental supply, and demand has cooled slightly, it still substantially outweighs supply. On average, there are more than 15 enquiries for every home to rent across the UK. This is lower than the peak of 40 enquiries in 2021, but double the rate prior to the pandemic (Zoopla).

Annual Change In Rents

                                                                                                                                   

Data: Zoopla

Single Family Rental (SFR) became a strong area of focus for the Build to Rent (BTR) sector last year, and is tipped to be a key area of focus of private investors over the coming few years, with 71% planning to invest in SFR by 2028 (Knight Frank). Rather than tall apartment blocks, SFR refers to family homes, typically in commuter, suburban locations. This sector shift has followed the demand, when residents would typically have been purchasing their family home they have been pushed into renting due to economic restraints, spurred on by the rise in cost of living, more expensive mortgage products and the end of the government’s Help to Buy scheme. The trend of the past 20 years has only continued with now over twice the number of private renters compared to 20 years ago.

 

Number of housholds occupied by private renters in England 2000 -2023 (Millions)

                       

                                                                                                                                   Data: Statista

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