News
Rental market outlook for 2021
Thursday 7th January 2021
GRAINNE GILMORE
As we look ahead to 2021, it's worth considering how the rental market has changed over the last 12 months, most notably with the emergence of a "two-speed" market.
On the 'fast setting' is most of the UK. Average rents outside London are up 1.7% on the year.
Rental growth has been spurred on by the bounce back in demand after the first lockdown. As well as pent-up demand coming back to the market, the demand patterns we saw also suggested that a significant cohort of renters, just like homeowners, had used the first lockdown as a chance to reassess where they were living and the type of home in which they were living - and make a move.
There was more demand from those living in cities to move elsewhere within the city, with specific demand for gardens, balconies and pet-friendly accommodation.
A strong uplift in rental demand in some more rural markets and coastal locations also signalled that the rise of working from home, effectively cutting out the commute, had expanded the search radius of some renters.
In November, rental demand was up by more than 60% on the year in the Cotswolds and West Oxfordshire. The biggest rise in rental demand was seen in Dover, Herefordshire and Dundee. In many areas, this rising demand was not matched by supply, which puts upward pressure on rents.
Looking ahead, as the vaccine rolls out across the country, there is a suggestion that life gets 'back to normal'. But the success of working from home means that working and commuting patterns may have changed for good. This signals that rental markets within wider commuter areas will remain active.
Access to the vaccine for all will also signal a welcome return of tourism and global business travel - and a subsequent pick-up in activity and demand in city centres.