"With the pace of the lettings market still strong, it is likely to be a challenging experience for many looking to secure a home that suits their needs and budget"
New market analysis covering ten major cities has found that a growing proportion of renters are fleeing city life to find a cheaper place to live or to get more for their money.
According to Rightmove, 42% of renters are now looking to move out of the city they currently live in while the remaining 58% are looking to stay in the city. This is an increase on the 37% who were looking to leave last year and up from 28% in pre-pandemic February 2020, with the capital seeing the biggest increase in proportion, followed by Sheffield & Manchester.
Rents rising at a record pace over the past few years and a decline in the number of available properties to move to are likely reasons that a greater proportion of renters are looking outside of the city to secure a home.
Average asking rents across Great Britain are up 11% compared with this time last year, and up 12% across ten major city centres on average.
Edinburgh City Centre has seen the largest increase in average asking rents compared with last year (+19%), followed by Inner London (+18%) and Manchester City Centre (+14%).
Another contributing factor to leaving a city is that demand from renters to secure each available rental property has rapidly increased. Competition to secure a home to rent in a city centre has more than doubled compared with three years ago (+125%).
Some good news for renters is that competition between tenants is easing slightly compared with the record levels of last year. Compared with last year, tenant demand for each available rental home across Great Britain has dropped by 4%, and the number of available homes to rent has increased by 8%.
Renters are also looking at a wider spread of areas than they did before the pandemic. The average spread of areas a renter considers when moving has nearly doubled (+87%) since February 2020 to 122km², as renters cast their net wider to find a home.
The impact of financial uncertainty and the rising cost of living is demonstrated in the way renters are looking for their next home. The latest data suggests tenants are less certain about how much they can afford to pay when beginning their search for a home to rent.
35% of renters across Great Britain end their search with a property that is cheaper than the first one they contacted an agent about, up from 31% three years ago. For those who can afford it, more renters are also ending their search with a more expensive property than the first one they contacted an agent about, up from 34% three years ago to 42% now.
With both figures rising, it shows tenants are less likely to stick to a budget during the course of their search, and more likely now to either look for somewhere cheaper or budget for somewhere more expensive, in order to secure a home.
Tim Bannister, Rightmove’s property expert, comments: “The latest rental market trends demonstrate how cost pressures and the imbalance between supply and demand are changing the way tenants search for their next home. We’re seeing that a greater proportion of prospective buyers are looking for a home in the city they live in, but it’s the opposite trend for renters who may be finding that they’ve been priced out of the city or have decided to move further out to reduce their overall bills.
"Some good news for renters is that some competition with other tenants and pressure on available homes to rent seems to be easing, however with the pace of the lettings market still strong, it is likely to be a challenging experience for many looking to secure a home that suits their needs and budget.”
Sarah Bush, Head of Lettings at Cheffins in Cambridge, adds: “Availability in city centres is low, and these locations always command premiums, however as rental levels continue to rise, we are seeing that tenants are now looking to just let what they can afford, rather than holding out for a property in the right location.
She concludes: "In busy areas like Cambridge, the lack of available properties has forced up prices and this is coupled with demand from job movers or those who are only coming to the city for a short amount of time for employment reasons. These are the tenants who are now having to compromise with a village or rural location. Similarly, families who need to rent properties with three or four bedrooms often have to turn to village properties to simply get the space they need at an affordable level.”
