Of course, this largely depends on a mix of individual outlooks, lifestyle choices, family, work and finances. What we do know is that the market did experience a demise in rental demand across the UK’s major cities in recent times. And this has raised some questions over people’s appetites for city living and landlords’ approaches to urban properties which have proved highly desirable in times gone by.
Well, according to research from estate and lettings agent, Barrows and Forrester, rental demand has started to return to the majority of major UK cities during the second quarter of this year, with all but a handful of London boroughs also seeing an uplift. In its analysis of 23 major UK cities, it found that rental demand is currently at 33% on average, up from 23% in the second quarter of 2020. There have been notable uplifts across a number of cities, with 12 locations from Bournemouth to Cambridge, Bristol to Manchester and more, all-seeing double-digit year-on-year growth.
Just three cities are reported to have seen a decline in rental demand over the last year. Belfast has seen a drop of -12%, while Plymouth (-4%) and Nottingham (-1%) have also seen a marginal decline. While London has arguably been one of the worst-hit areas of the rental market during the pandemic, there are signs of a revival with rental demand averaging 30% in Q2 2021, a 4% uplift on the second quarter of 2020.
With many people returning to the workplace, it’s encouraging to see the City of London sit top with the largest increase at 15%. Kingston upon Thames and Hammersmith and Fulham have seen the second-largest increase in rental demand, with both boroughs up 11% annually in Q2 2021. Lambeth has also seen a double-digit increase (+10%), however, eight London boroughs continue to see a decline. Rental demand in Croydon is down -6% year on year, with Waltham Forest, Hillingdon, Havering, Lewisham, Haringey, Enfield and Newham also seeing a decline.
Additional data and market analysis focusing on the London market from Knight Frank suggested that the capital's prime sales and lettings markets saw multiple records broken during June as demand continued to build ahead of the stamp duty holiday deadline and the easing of lockdown restrictions. It revealed that the number of new prospective tenants registering reached the highest level on record, as did the number of viewings. Compared to 2019, which was an active year in the lettings market, the number of viewings was 82% higher in the month of June, with the number of new prospective tenants said to be 97% higher.
Although UK lockdown restrictions have not yet been fully relaxed, the figures underline the extent to which demand has built during successive national lockdowns. These will be interesting trends to follow for landlords and the intermediary market, although we have to realise just how dynamic the rental market needs to be when meeting shifting tenant demands and how lenders can support landlords, investors and developers in meeting these demands.
