Zoopla June Rental Market Report
Discover the latest trends in the rental market with insights from Zoopla's June 2024 report.
Stay ahead of the rental market trends by reading our overview of Zoopla's latest rental market report.
UK Rental Inflation at a 30-Month Low
The average monthly UK rent has risen by £80 in the past year, reaching £1,226. Annual rental inflation has slowed to 6.6%, the lowest rate since October 2021. If recent rental increases are annualised, the rate would be 3%, Indicating a continued slowdown.
Demand and Supply Dynamics
The imbalance between rental supply and demand is narrowing but remains significant. Rental demand has decreased by 25% over the last year, yet competition is still high, with 15 households vying for each rental property, more than double the pre-pandemic average. The average number of rental homes per estate agent has risen by 18% year-on-year, offering more choices to renters. However, supply is still a third lower than pre-pandemic levels.
Regional Variations
London has seen the most significant slowdown in rental inflation, with average rents rising by just 3.7%, compared to over 13% a year ago. In contrast, regions like the North East and Scotland have recorded the highest rent increases at 9.5% and 9.3% respectively. Some cities, including Nottingham and Brighton, have experienced slight rent decreases over the last quarter, reflecting local supply changes and more price-sensitive demand.
Affordability Concerns
Rents for new lets have been rising faster than average earnings for over two years. However, as rental inflation slows, the gap is narrowing. Despite this, rent levels are supported by strong demand and low investment in new rental properties. The proportion of gross earnings spent on rent is at its highest in a decade.
Future Outlook
The rental market is expected to see continued slowdown in rental inflation, potentially reaching 5% over 2024. This is largely due to demand changes rather than supply increases. Policy changes, such as potential rental reform, could influence the market, but the primary focus should be on increasing the supply of rental homes to improve the choice and affordability for renters.
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