The UK rental sector has been growing at a rapid pace in recent years. The lack of available rental supply combined with homeownership becoming increasingly inaccessible ahs put more pressure on the rental market than ever before.
With more people renting, competition for properties goes up and prices increase. This is especially true in the busiest city centre rental markets like those found in Manchester, Birmingham and other up-an-coming hotspots like Preston.
In places like these, properties are rented as soon as they come on the market, and new luxury properties are in extremely high demand.
The latest figures from the Office for National Statistics and other sources including Zoopla show that not only are rents at historically high levels, the speed at which they are growing is increasing.
The annual rate of rental growth was 7.8% as of January 2024, and increased to 9% year-on-year in the latest figures. This shows that the pace of growth is accelerating as we enter one of the busiest points of the year – implying that further growth may be on the way.
What’s more, a deeper look at the Zoopla statistics shows that some places are exceeding the average rental growth. For example, Manchester’s rental growth is 9.6% year-on-year as the market grows faster than that in the rest of the UK.
We have previously reported on the strength of Manchester’s rental market, with data from urbanbubble – one of the city’s largest property management companies – showing that city centre apartments in Manchester of all types are growing strongly, as follows:
- Studios – Average rent of £1,049 pcm; annual increase of 15%
- One-bed apartments – Average rent of £1,146 pcm; annual increase of 9%
- Two-bed apartments – Average rent of £1,519 pcm; annual increase of 9%
- Three-bed apartments – Average rent of £2,106; annual decrease of 5%
In Manchester city centre, the baseline for almost all luxury apartments is the national average, with studios growing far in excess of this figure.
Even three-bedroom apartments which appear to be seeing lower than average growth must be viewed in context. In this case, they are growing from a baseline of historic highs, and 5% on top of what is already an unprecedented number should offer confidence to any investors looking for in Manchester property for sale.
Want to buy rental property in Manchester? See our latest developments here.
The future looks just as impressive. By the end of 2028, Savills is expecting to see further rental price growth of at least 18.1% across the country. Based on current trends, investors can anticipate even higher growth in regional city centre markets.
The supply and demand imbalance is going nowhere thanks to low construction rates, and properties being built at the moment will be entering a market that is desperate for new homes.
Buying off-plan property in the UK is a good strategy for tapping into this market and generating reliable, long-term returns.
Want to learn more about off-plan property for sale in Manchester or Birmingham? Get in touch with the team today to discover our available options.
