Tag: accommodation

UK rental growth hits 13 year high as demand increases in Scotland’s major cities

  • Acute rental demand over Q3 2021 has pushed UK rental growth to its highest level since 2008
  • Annual rent growth has increased by 7.2% in Glasgow and 3.6% in Edinburgh
  • Demand continues to outstrip supply, which is running at 43% below the five-year average – exerting an upward pressure on rents
  • Average UK rents are now tracking at +4.6% on the year [and 6% excluding London], after climbing 3% over the last quarter – with rental demand doubling in central Leeds, Manchester and Edinburgh and London in Q3 v. Q1
  • Rental growth is close to, or at, a 10-year high across most UK regions – except for in London and Scotland
  • After 15 months of consecutive falls, London’s rents have swung back into positive territory, rising by 4.7% between June and September, as offices reopened and city life resumed
  • The structural undersupply of rental properties across the country and the strength of the employment market will support rental growth into 2022
  • UK rental growth [excluding London] is set to ease slightly to 4.5% by the end of 2022

UK rental market growth has reached a 13 year high as renters rush back to city centres, reports Zoopla, the UK’s leading property portal, in its quarterly Rental Market Report.

Record price growth defines new era for the UK rental market

Acute tenant demand over the third quarter of 2021 has propelled UK rental growth to its highest level for over a decade [13 years]. 

The market is being shaped by an ongoing supply and demand imbalance, with demand continuing to outstrip supply, which is running at 43% below the five year average and exerting an upward pressure on rents. 

The imbalance has been compounded by both long-term structural issues such as landlord divestment following the 3% stamp duty levy introduced in 2016, and more the immediate post-lockdown demand, which collectively have eroded available supply.

Average UK rents are now tracking at 4.6% year on year, after climbing 3% over the last quarter. Excluding London, where the market has lagged, average UK rental growth has reached a 14-year high of +6%.

Rental growth is also explained in part by tenant demand moving up the price bands [see figure 1]. This reflects the ongoing search for space, which has not only characterised the sales market, but the rental market, too.

Figure 1

Affordability remains steady – despite pan-regional rises

UK monthly rents now account for 37% of an average income for a single tenant occupant; however, even with strong rental growth, the measure of affordability remains in line with the five year average [see figure 2]*.

The regions registering the highest levels of rental growth are among those that are the most affordable when compared to the UK average, and as such, there has been more headroom for rents to increase. 

Rental growth is close to, or at, a 10-year high across most UK regions – except for in London and Scotland. Rents are up most in the South West (9%) year on year, followed by Wales (7.7%) and the East Midlands (6.9%).

In many of the UK’s largest cities, annual rental growth is running well ahead of the five-year average rate of growth. Bristol leads with 8.4% growth in the year to September, followed by Nottingham at 8.3%, and Glasgow at 7.2%.

Rental demand in the central zones of Manchester, Edinburgh  and Leeds has at least doubled over Q3 compared to Q1, and in Birmingham demand has increased by 60% – buoyed by the return of office workers and students, and the lure of city life.

Figure 2

London rents rebound into positive growth – but remain lower than pre-pandemic levels

After 15 months of consecutive falls, London’s rents swung back into positive territory, up +4.7%, in Q3. This amounts to annual growth of +1.6% compared to falls of almost 10% at the start of the year.

As with other major UK cities, market activity rose significantly in Q3, with tenancies agreed in London running 50% above the five-year average, underlining the bounceback in the market as offices reopened and city life resumed.

Despite this upward trajectory, given the falls over the last 18 months, average London rents are still 5% lower than they were at the start of the pandemic.

Rents forecast to rise by a further 4.5% by the end of 2022

Looking ahead to the new year, the structural undersupply of rental properties across the country is expected to support rental growth into 2022. 

In addition, the supply shortage coupled with the strength of the employment market which, despite the pandemic, is set to remain robust, will in turn support demand and sustain rental growth.

While the level of rental demand might ease in the near term in line with seasonal trends, demand levels will  remain higher than usual, especially in city centres, where there is an element of pent-up demand being released.

On the supply side, rental stock will remain tight, amid lower levels of investment into the sector by landlords, and this will underpin rental pricing. There is more leeway for stronger rental growth in areas of the country where rents are relatively more affordable, suggesting that rents could rise above earnings outside of the south of England, supporting rental growth across the UK excluding London at 6% in 2021 and 4% in 2022. 

Meanwhile, London rental growth is expected to pick up to 3.5%, with rents ultimately exceeding pre-pandemic levels.

Gráinne Gilmore, Head of Research, Zoopla, comments: “The swing back of demand into city centres, including London, has underpinned another rise in rents in Q3, especially as the supply of rental property remains tight. 

“Households looking for the flexibility of rental accomodation, especially students and city workers, are back in the market after consecutive lockdowns affected demand levels in major cities. 

“Meanwhile, just as in the sales market, there is still a cohort of renters looking for properties offering more space, or a more rural or coastal location.” 

*The methodology Zoopla has used to calculate affordability has changed from the last quarter; Zoopla is now using ASHE data, and previously used the Labour Force Survey.

Zoopla Quarterly Rental Market Report: Renters revive central Edinburgh housing markets

  • One year on since the housing market reopened, and the Covid-led decline in rental demand for city centre housing is bouncing back
  • As the UK emerges from lockdown, renter demand is up 26% in central Edinburgh, 12% in central Leeds, 7% in inner London and 5% in central Manchester in the month since Easter
  • London’s rental demand is being fuelled in part by a sharp improvement to affordability; with rents down -9.4%, affordability is running at a ten year high
  • Average rents in the City of London, Kensington and Chelsea, and Westminster, are running at their lowest for a decade, with average Westminster rents running at £2,259 pcm – down from £2,617 pcm in February last year
  • By contrast, UK rents outside of London are up 3% on the year, signalling the highest level of growth in four and half years
  • Rents are rising fastest in the North East (+5.5%) and the South West (+5.3%) yoy – the strongest rates of growth in a decade in these regions amid increased demand and constrained supply
  • Rental performance outside of London is being driven by a 59% uptick in demand for rental properties in the 28 days to the end of April, compared to the average demand recorded during the same month in the more  ‘normal’ markets of 2017 -19

One year on since the housing market reopened and the Covid-led decline in rental demand for city centre housing is starting to bounce back, as the UK emerges from lockdown and affordability for renters improves.

These are the latest findings from Zoopla, the UK’s leading property portal, in its quarterly Rental Market Report:

City centre rental markets finally revived

The impact of Covid was felt most acutely in the city centre rental markets of the UK’s major regional cities. Central Edinburgh, Leeds, Manchester and London were at the forefront of the rental slowdown, as offices remained closed and an extended hiatus in tourism took hold. 

Stock moving over from short-term lets into the rental market, and more rental stock coming back to the market amid easing demand, led to a softening in rents in city centres, which are still down by  0.7% in Leeds, -1.1% in central Manchester, -3.2% in central Edinburgh and -9.9% in inner London (see figure 1).

However, the city centre downturn is starting to reverse as the economy opens up, workers start to return to their offices, leisure activities restart, and renters return in search of a rental bargain and restoration of their social life.

Renter demand is up 26% in central Edinburgh, 12% in central Leeds, 7% in inner London and 5% in central Manchester in the month since Easter – and is starting to absorb the supply surplus that characterised the market over the past year.

Figure 1: Rental growth in inner and outer cities in March 2021

Source: Zoopla Research

London’s rental affordability reaches ten year high

Rental declines in London bottomed out in February of this year, down -10% year on year, with overall London rents now running at -9.4%. Average monthly rents are now at the same level as they were in December 2013.

The fall in rents in London over the past year has resulted in rents being at their most affordable for ten years. Average rents now account for 42% of an average single-earner income in London, down from 49% in March 2020, and a peak of 53% in Q4 2016

Average rents in the City of London, Kensington and Chelsea, and Westminster, are running at their lowest for a decade, with the average monthly rent in Westminster at £2,259 – down from a high of £2,617 in February last year.

Many of London’s renters are looking to future-proof current rental affordability, locking in cost savings for as long as possible, with agents reporting an increased number of longer-than-average tenancies (in excess of 12 months) being agreed.

Regional rents rising 3% year on year – but affordability remains unchanged

The rental market outside of London paints a starkly different picture, with rents rising at 3% year on year, signalling the highest level of growth in four and half years (see figure 2).

Despite rent rises, average affordability remains broadly unchanged as wages rebound from the dip recorded last summer, keeping pace with rental growth.

Rents are rising fastest in the North East (+5.5%) and the South West (+5.3%) year on year – the strongest rate of growth in a decade in these regions amid increased demand and constrained supply. However, the North East remains one of the most affordable regions in the country, with average rents absorbing 21% of the income of the average single earner (pre-pandemic, compared to the UK average of 32%.

Northern towns of Wigan and Barnsley are seeing some of the highest rental growth in the country, at 8%, with Rochdale at 7.8%; this outperforms average annual rental growth in these towns of around 1.5% between 2011 and 2019 by some margin.

Current rental performance is being driven by a 59% uptick in demand for rental properties in the 28 days to the end of April, compared to the average demand recorded across the ‘normal’ markets of 2017 -19. In the first quarter of the year, demand for rental property outside of London was 32% higher than the same period last year.

Figure 2

The supply challenge

The supply of rental properties in most markets is failing to keep up with demand, and the new supply of property coming to the market outside of London is 5% lower than in Q1 last year.

Supply constraints are being driven by a multitude of factors. Firstly, many renters were unable or reluctant to exit the rental market and buy a property during the pandemic, limiting the flow of renters out of the sector, and absorbing more supply. At the same time, investment into the private rental market, which is predominantly made up of independent landlords, has not recovered to 2015 levels, before the additional 3% stamp duty levy was introduced for investors.

The number of properties purchased using a buy-to-let mortgage was 45% lower in 2020 than in 2015, and the number of homes in the private rented sector has fallen slightly since 2016 as landlords rationalise their portfolios in the face of tax changes and additional regulation.

Private outdoor space remains top priority for renters

Increased demand for private outdoor space has characterised renter behaviour throughout lockdown, but even as we emerge from pandemic restrictions, it remains a priority.

The proportion of renters searching for rental properties with gardens has doubled since the pre-pandemic period last year. The good news for renters is that nearly half of properties available to rent currently have a garden or access to a shared garden, and the number of these properties available to rent has risen during Q1 to levels seen last summer. 

David Ross, Managing Director, Hometrack, comments: ““Rental demand will continue to rise in city centres as offices start to re-open and this, coupled with increased affordability levels in many cases, will start to counter the negative pressure on rents seen over the last 12 months.

“In London, where rents are down 9.4% on the year, a modest reversal in rental declines has begun, but it will be a slow build back to pre-pandemic levels in inner London. 

“The recovery will be uneven and we expect new or recently refurbished properties to attract higher levels of demand in H2.”

Rental sector loan schemes extended

Tenants and private sector landlords facing financial difficulties caused by the pandemic have more time to access support after two loan schemes were extended.

The Tenant Hardship Loan Fund and the Private Rent Sector Landlord (non-business) COVID-19 Loan Scheme, both of which offer interest-free loans, will continue to receive applications beyond the original deadline of 31 March 2021.

It comes after Housing Minister Kevin Stewart extended temporary regulations banning the enforcement of eviction orders in the private and social rented sectors, giving further safeguards to tenants during the Coronavirus (COVID-19) crisis.

Mr Stewart said: “Throughout this pandemic our focus has been on enabling people to stay safe in their homes while the lockdown restrictions needed to suppress the virus are in place.

“These loan schemes have provided vital support as part of our broader effort to help those facing financial hardship as a result of COVID-19. For the majority of tenants facing financial difficulties and arrears the best means of support continues to be regular non-repayable support, for example through Universal Credit and Discretionary Housing Payments.

“However, for those who may fall through the gap and are unable to claim such support, these funds offer a helping hand to manage any rent issues that have arisen in the last few months as a result of COVID-19.

“We have been clear that no landlord should evict a tenant because they have suffered financial hardship due to the pandemic and that tenants in difficulty should engage with their landlord and seek advice on the options open to them.”

Applications for the Tenant Hardship Loan Fund and the Private Rent Sector Landlord (non-business) COVID-19 Loan Scheme can be completed online. 

Praise for team tasked with overseeing wellbeing of Europe’s largest lockdown student population

MORE than 4,500 students housed in university-managed accommodation have been able to access vital support throughout the pandemic, thanks to a dedicated team comprised of staff and students.

“Residence Life” at the University of Edinburgh has been responsible for the welfare of what is thought to be Europe’s largest population of “locked-down” students, as thousands of predominantly international students remained in the City as the pandemic hit. 

The innovative group, founded in 2014 on an evidenced based model popular in large campuses in the United States has worked throughout lockdown, moving digitally and increasing its programme of community-building events.

Its team consists of student welfare professionals, wardens living on-site and 200 Resident Assistants (RAs) – returning students who are appointed to welcome and support first year students while running a busy events calendar.


Christopher Tucker, Director of Residence Life, (above) said: “It’s well documented that adapting to the first year of university life can be extremely challenging for many, even in normal times.

“For lots of students living away from home, the lockdown will have really taken its toll, making them feel isolated, uncertain and a long way from family.

“The response from our team has been nothing short of remarkable. We have supported the University’s Community Support team with delivering food outside the door of anyone self-isolating or shielding, along with basic cleaning supplies.

“We have also been calling these students daily to check in and monitor their recovery, while encouraging physical distancing in the accommodations. Furthermore, the team has been incredibly creative and organised virtual social events that have proven far-reaching and popular, we have had over 10,000 in attendance to all of our events since we started our program.”

“We have also developed new and creative ways to provide a mixed model of 24-hour digital and in person welfare support to all of our residents.  Throughout the pandemic Residential Life has been supporting our community using these developing practices.”  

The University has praised the Residence Life team for stepping up to the challenge at such a challenging time.

Carina Svensen, Director of Accommodation, Catering and Events at The University of Edinburgh, said: “We have nothing but admiration for the way in which our Residence Life, its wardens and its student team has stepped up to the challenge of looking out for the wellbeing of this large, often vulnerable population.

“It just demonstrates that Residence Life is a huge selling point for the University’s accommodation. We hope it gives students joining in the weeks ahead a lot of confidence and reassurance.”

Events created by RAs have ranged from online cook-alongs, life drawing, wine and cheese nights and academics have been invited to host webinars on a range of topics.

Christopher added: “It’s been vital that while we’re so detached physically, we still foster a real community spirit. Nobody living in our accommodation should feel alone.

“We’ve noticed some really interesting trends too, which we hope we can take forward with us. 

“It’s been fascinating to see how quickly students have moved back to Facebook for its community, a platform most young people now associate with their parents! Like most of the country, students are loving learning simple pleasure skills, such as baking and drawing.

“Going forward into the new academic year we’d naturally love to be able to host more in-person events, but if there is one good thing that can come out of the pandemic, it has shown just how quickly we can come together online.”

The University of Edinburgh has one of the largest accommodation offers of any university in the UK, with the capacity to house more than 10,000 undergraduate and postgraduate students. It typically witnesses significant excess demand for spaces.

Operated by its Accommodation, Catering and Events team, this group has developed and provides a range of new approaches to keep student residents safe, including providing support for those required to self isolate in their rooms, including meal deliveries.

Physical distancing measures are being introduced in all public areas, which will be subject to increased cleaning and disinfecting measures.

Travelodge to open six hotels in the lead up to Christmas

Travelodge, the UK’s first budget hotel chain announces it is opening six hotels in the lead up to Christmas. This equates to an average of one hotel opening every 12 days. 

One of the new hotels is at South Gyle. Continue reading Travelodge to open six hotels in the lead up to Christmas

New Hotel for 100 Princes Street

The Red Carnation Hotel Collection is to open a hotel in Scotland for the first time, with the aim of making it the number one hotel in Edinburgh. The luxury hotel collection has announced plans to ‘respectfully renovate’ 100 Princes Street, transforming it into a highly exclusive retreat on Edinburgh’s most famous street.

With uninterrupted views of Edinburgh Castle, the property will replicate the boutique atmosphere of Forbes Five Star-rated sister property Hotel 41, which has retained the position of TripAdvisor’s number one hotel in London for over ten years as well as the TripAdvisor Traveller’s Choice Best Hotel in the UK for the last three.

The award-winning hotel company behind the loving restoration of Ireland’s Ashford Castle, once home to the Guinness family, will bring the same meticulous care and attention to the listed building’s interior, embracing its history and heritage and using the finest local artisans and suppliers. 100 Princes Street will reopen in 2020 as Red Carnation Hotels’ 19th property worldwide.

Jonathan Raggett, Managing Director of Red Carnation Hotels, said: “It has been a dream of ours to open a hotel in Edinburgh for some time, and with the best address in the city, it was well worth the wait.

“Guests at 100 Princes Street will enjoy everything that makes Red Carnation so special, from our individually designed interiors to the signature dishes of our President and Founder Beatrice Tollman, delivered with passionate service, generous hospitality and a genuine commitment to the environment and communities in which we operate.”

New hotel opening creates affordable Edinburgh Fringe stays

Point A Hotels has released rooms for sale in its newest hotel in Edinburgh, meaning that nearly 4000 hotel nights will be newly available over the busy Edinburgh Fringe period, August 2nd – August 25th.

The Point A Hotel Edinburgh, will open on Monday (8th July) and as a special offer upon opening, the hotel will be offering a 20% discount for direct bookings on PointAHotels.com*.

The latest addition to the Point A Hotels budget boutique brand, Point A Edinburgh, will bring low-priced stylish rooms to the centre of the Scottish capital – the most visited destination in the UK outside of London – in time for the 2019 Edinburgh Festival Fringe.

Point A Edinburgh is located close to Haymarket Station, with 149 guest rooms (including 8 accessible rooms) and some featuring breath-taking views over Edinburgh’s iconic buildings.

It will feature a spacious, 24-hour hosted reception and a lobby lounge, where Point A’s signature Brekkie will be served daily, and refreshments will be available 24/7. It will also have an extended food and beverage offering that includes pre-mixed alcoholic drinks and miniatures offered for sale at the bar and hot food in the lounge including a selection of pizzas and chicken wings.

Within the new Edinburgh property, there will be free, superfast WiFi throughout the public areas and the guest rooms, which also feature luxury Hypnos beds with fabric headboards and throws from the Isle of Bute, power showers, mood lighting and a 43-inch Samsung Smart TV, with Google Chromecast which allows customers to watch their own content on the hotel TV, providing a home from home experience.

“Our Edinburgh hotel will be beautifully designed offering our guests a sense of style without a huge price tag,” commented Nic Wenn, Managing Director, Point A Hotels. “It is located centrally and will give those wishing to attend the Edinburgh Fringe easy access to catch one of the many great performances across the city.”

Guests of Point A Edinburgh will be able to take advantage of extra-value offers and deals at local bars and restaurants through Point A Hotels’ free-to-join signature loyalty programme, the A-List. Guests can sign up to the A-List at pointahotels.com to also receive a permanent 10% off all future bookings at any Point A Hotel.

The newest hotel will join Point A Hotels’ existing portfolio of seven modern, centrally-located UK hotels offering guests exceptional service and comfort at affordable prices. Six of the Point A Hotels are in London – Shoreditch, Liverpool Street, King’s Cross St Pancras, Paddington, Westminster and Canary Wharf – and one is in Glasgow, Scotland. A further hotel in London is due to open this summer in Kensington, located on West Cromwell Road.

* 20% discount applies to bookings for stays in July and August 2019 at Point A Edinburgh only with the discount code LAUNCH and made viawww.PointAHotels.com 

Red Sky offers luxury camping at Edinburgh Festivals

Red Sky Tent Company Limited (“Red Sky”), one of the UK’s most comfortable luxury camping experts, will be offering a great night’s sleep without breaking the bank at this year’s Edinburgh Festivals, with the launch of Red Sky’s Fringe Pop-Up Hotel. Continue reading Red Sky offers luxury camping at Edinburgh Festivals