Rental inflation is slowing, with London and major cities leading the way. However, towns and rural areas are continuing to see rents rise. Find out what’s happening in Manchester in our Rental Market Report.
The average rent for new lets in the UK is £1,245 as of July 2024 (published in September 2024).
Rents have risen 5.4% in the last year, the slowest rate of growth in 3 years. As always Mnahcester is outperforming the national average with an annual increase of 6.3% The average rent across the city is now £1,088 per month
Rental demand to remain above average
There has been a clear step down in rental demand over 2024 as ‘one-off’ pandemic factors fall away and lower mortgage rates enable some renters to buy, freeing up homes for rent.
Visa rules for students and workers have also been tightened and are likely to reduce levels of net migration, although the scale of change is unclear.
The competition for rented homes is still running at twice pre-pandemic levels and we expect demand to remain elevated into 2025 despite a softening labour market.
The unaffordability of homeownership will continue to support demand for renting, especially across southern England, where a sizeable proportion of workers are unable to buy.
A lack of meaningful growth in the supply of affordable housing means the private rented sector will continue to see demand from those on lower incomes, adding to demand further.
Will rents keep rising in 2024?
We expect rental inflation to slow to 3-4% by the end of 2024 as weakening demand and affordability pressures limit rental growth.
Weaker rental growth in cities will lead to a slowdown, but there is a large rental market outside these cities where there is room for above-average growth. This explains the more drawn-out slowdown in rents.
Tax and policy change will continue to see some landlords exiting the market, keeping supply constrained, resulting in an upward pressure on rents into 2025.
The unaffordability of home ownership will continue to support strong demand for renting into 2025, and any policy changes that reduce supply will simply push rents higher - hitting low-income renters hardest.
It’s vital that policy makers in Government focus on growing the stock of homes for rent.
Source: Zoopla.com
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