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The average monthly rent for a newly let property has increased by £270 since the start of the pandemic, according to figures from Zoopla. This increase is due to high demand from tenants after lockdowns were lifted and the limited numbers of available properties made the rental market “red-hot”. Rent has gone up by 27% over the last three years, compared with a 19% rise in average earnings during the same period. However, the rate of growth has slowed, potentially as renters approach the limit of what they can afford. Demand remains high, however, with almost a third more renters than before the pandemic.
While demand is pushing up rents at the lower end of the market, those in the cheapest areas may now face the sharpest rent rises. Zoopla executive director of research Richard Donnell said that “people are seeking out the best value for money”, but there are limited properties available. Renters have previously written CV-style letters to agents or offered several months of rent upfront to secure properties in a highly competitive market. Zoopla maintains that there are signs of the rental market cooling, but such pockets of escalation remain: annual rental inflation stands at 10.5% in Northern Ireland, compared with 1.3% in London.
Newly vacant properties accounted for a quarter of the rental sector analysed by Zoopla. The property portal has forecast an average rental rise of 4% next year, with demand increasing faster than supply. The lack of availability has been brought about, at least in part, by multiple landlords selling properties from their rental portfolio, with 31% planning to do so over the next two years. The National Residential Landlords Association wants reassurances over eviction rules and changes to housing taxation to address the perceived shortfall in supply.
Agents have suggested measures that could help prospective tenants to secure rental properties, including building a good relationship with estate agents, having payslips and references at hand, and being aware of the budget. Zoopla maintains that renters are showing a preference for areas in and around major cities
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