UK Rental Market Report - Q1 2022
“High levels of demand amid constrained supply is still putting upward pressure on rents, but affordability pressures will mean an easing in rental price growth through the rest of 2022”
The rate of rental growth has gained momentum across most markets in the last six months as post-pandemic demand surged back into city centre markets and the supply of properties for rent struggled to keep pace.
Executive Summary
UK annual rental growth for new lets rises to 11% in Q1 2022 as demand continues to outstrip supply
Rents have bounced back from a -1% fall a year ago
Wage growth hit 8.8% last year, and cumulatively, UK rental growth has not kept pace with earnings or inflation since 2016
Rental demand is particularly acute in city centres as students, office workers and international demand returns
The rise in rents is pushing up the affordability metrics, to 37% of gross income for a single earner, and 18.5% for sharers
Tenancy lengths continue to rise, signalling that some renters may be ‘rolling over’ their rental contract with lower rent rises
Rental growth will start to slow in H2 as the ‘bounce-back’ eases and more challenging economic conditions emerge.
