{"id":85451,"date":"2023-12-12T03:40:19","date_gmt":"2023-12-12T03:40:19","guid":{"rendered":"https:\/\/mylifestylemax.com\/?p=85451"},"modified":"2023-12-12T03:40:19","modified_gmt":"2023-12-12T03:40:19","slug":"red-hot-rental-market-is-set-to-cool-next-year-amid-affordability","status":"publish","type":"post","link":"https:\/\/mylifestylemax.com\/lifestyle\/red-hot-rental-market-is-set-to-cool-next-year-amid-affordability\/","title":{"rendered":"Red-hot rental market is set to cool next year amid affordability"},"content":{"rendered":"<h1> Red-hot rental market set to cool next year as tenants simply won&#8217;t be able to afford asking prices, says Zoopla<\/h1>\n<ul>\n<li><strong>Average rent on a new property is 9.7% higher than a year ago, says Zoopla<\/strong><\/li>\n<li><strong>But this is a fall compared to the 11.9% annual growth the year before that\u00a0<\/strong><\/li>\n<li><strong>Biggest slowdown in rents during the past year has been seen in London\u00a0<\/strong><\/li>\n<\/ul>\n<p>The red-hot rental market is set to cool next year as rents have simply risen too fast in some areas, experts predict.<\/p>\n<p>In its latest rental report, Zoopla claimed tenants face no longer being able to afford the high rents in some areas, something that has already led to growth for new lets dropping to single digits.<\/p>\n<p>The growth in rents slowed to 9.7 per cent higher in December, down from 11.9 per cent a year ago.<\/p>\n<p>Zoopla said the pace of growth could be set to halve in 2024.<\/p>\n<p>It said rents have risen at such a pace during the past three years that they are &#8216;reaching a ceiling&#8217; as tenants face growing affordability pressures.<\/p>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"aligncenter\" src=\"https:\/\/i.dailymail.co.uk\/1s\/2023\/12\/11\/15\/78825703-12850547-image-a-23_1702308001717.jpg\" height=\"423\" width=\"634\"><\/p>\n<p>The red-hot rental market is set to cool, according to a new report by property website Zoopla<\/p>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"aligncenter\" src=\"https:\/\/i.dailymail.co.uk\/1s\/2023\/12\/11\/17\/78822983-12850547-The_annual_growth_in_rents_is_forecast_by_Zoopla_to_slow_during_-a-6_1702315550758.jpg\" height=\"373\" width=\"634\"><\/p>\n<p>The annual growth in rents is forecast by Zoopla to slow during the course of next year<\/p>\n<p>Lettings agents confirmed that a slight shift was already beginning to occur in the market.\u00a0<\/p>\n<p>Harriet Scanlan, of Richmond estate agents Antony Roberts, said: &#8216;We have seen a slight shift in the dynamic of the rental market with increased stock becoming available.\u00a0<\/p>\n<p>&#8216;This is offering tenants a broader spectrum of choice, leading to a decrease in multiple offers on each property, providing a more measured and considered approach for prospective tenants.<\/p>\n<p>&#8216;Landlords are still enjoying the benefits of a buoyant letting market, with little to no void periods. They also continue to enjoy rental increases upon renewal or reletting, although the pace of these increments appears to have slightly tempered.&#8217;<\/p>\n<p>Zoopla said London has seen the biggest slowdown in rents during the past year, down from 17 per cent a year ago to 9 per cent in December.<\/p>\n<p>Rents in the capital rose rapidly from the middle of 2021, having fallen by 10 per cent during the pandemic between 2020 and 2021.<\/p>\n<p>While the rate of growth may be slowing according to Zoopla, separate figures from Hamptons lettings agents showed that rents in London remain painfully high, typically at \u00a32,415 a month.<\/p>\n<p>It compares to an average rent in Britain of \u00a31,348, Hamptons said.<\/p>\n<p>Zoopla said annual rental growth is lowest in the inner London boroughs of the City of London, at 6.3 per cent, Westminster at 7.3 per cent and Tower Hamlets at 7.3 per cent.\u00a0<\/p>\n<h3>Four factors that pushed up rents\u00a0<\/h3>\n<p>A combination of factors have pushed rental demand well above average for the past three years, according to Zoopla.<\/p>\n<p>1. The\u00a0re-opening of the economy after pandemic restrictions were lifted from mid 2021 onwards, including a resumption of international travel.\u00a0<\/p>\n<p>2. The strength of the labour market with jobs growth boosting demand for rented homes.\u00a0<\/p>\n<p>3. Higher mortgage rates have made access to home ownership more expensive. This has kept would-be buyers in rented homes and reduced available supply.\u00a0<\/p>\n<p>4. Record levels of immigration into Britain, particularly high numbers of overseas students, has boosted demand.\u00a0<\/p>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"aligncenter\" src=\"https:\/\/i.dailymail.co.uk\/1s\/2023\/12\/11\/17\/78823117-12850547-Zoopla_explained_how_demand_and_supply_is_impacting_the_rental_m-a-7_1702315550759.jpg\" height=\"342\" width=\"586\"><\/p>\n<p>Zoopla explained how demand and supply is impacting the rental market across Britain<\/p>\n<p>At the other end of the spectrum, rental growth in Scotland continues to gain momentum and currently stands at 12.9 per cent, up from 11.4 per cent a year ago.<\/p>\n<p>Demand has been strong in Scotland, but rent controls are another factor behind the strong growth in rents for new lets.<\/p>\n<p>Landlords and agents are likely to be pushing rents higher to allow for the fact that rental increases will be capped at 3 per cent a year throughout a tenancy. There is also the affordability headroom to do this.\u00a0<\/p>\n<p>At a city level, rental growth in Edinburgh is up 5.2 per cent and up 13.2 per cent in Glasgow.<\/p>\n<p>Northern regional cities such as Manchester, Bolton, Derby and Newcastle are also seeing double-digit rental growth from strong demand and greater headroom for rents to increase relative to earnings.<\/p>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"aligncenter\" src=\"https:\/\/i.dailymail.co.uk\/1s\/2023\/12\/11\/17\/78825701-12850547-Zoopla_said_it_had_recorded_a_jump_in_cuts_to_asking_rents_of_mo-a-8_1702315550759.jpg\" height=\"427\" width=\"634\"><\/p>\n<p>Zoopla said it had recorded a jump in cuts to asking rents of more than 5 per cent, with the volume of reductions highest in London<\/p>\n<p>Zoopla claimed that there are &#8216;signs that rents have risen too fast in some areas,&#8217; with it recording a jump in cuts to asking rents of more than 5 per cent.<\/p>\n<p>This is tracking in line with the second half of 2020 when the pandemic hit demand and is evidence of growing resistance to rent increases from tenants who may be looking to move to cheaper areas.<\/p>\n<p>The volume of asking price reductions is currently highest in London, where 10 per cent of rental listings in November 2023 saw asking rent reductions of at least 5 per cent.<\/p>\n<p>Meanwhile, the proportion across the rest of Britain has also jumped to 7 per cent, the highest it has been for more than five years.<\/p>\n<p>Zoopla said it is evidence that the strong upward momentum in rents during the past three years is reaching a ceiling as tenants face growing affordability pressures.<\/p>\n<p>Reductions are spread across the market with a concentration in the \u00a31,000 to\u00a0 \u00a31,500 per month bracket.<\/p>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"aligncenter\" src=\"https:\/\/i.dailymail.co.uk\/1s\/2023\/12\/11\/17\/78823001-12850547-The_volume_of_asking_rent_reductions_of_at_least_5_per_cent_is_o-a-9_1702315550760.jpg\" height=\"352\" width=\"634\"><\/p>\n<p>The volume of asking rent reductions of at least 5 per cent is on the rise, says Zoopla<\/p>\n<p>Zoopla added\u00a0the slowdown in rental growth in 2024 will be kept in check by an ongoing scarcity of supply due to low levels of new investment in the face of more regulation and higher mortgage rates.<\/p>\n<p>It expects UK rental growth to slow to 5 per cent by December 2024 with growth in London of 2 per cent, the lowest level since 2021.<\/p>\n<p>Richard Donnell, executive director at Zoopla, said: &#8216;The UK is past peak rental growth which will be welcome news to renters who have seen rents rise by almost a third &#8211; 31 per cent &#8211; in the last 3 years.<\/p>\n<p>&#8216;London will lead the slowdown, acting as a drag on the UK growth rate.<\/p>\n<p>&#8216;The rental market has been stuck in a period of static supply and strong demand, which has pushed rents higher.<\/p>\n<p>&#8216;Demand has been driven by the strength of the labour market, the re-opening of the economy after the pandemic lockdowns, record immigration and higher mortgage rates, making it harder for would-be first-time buyers to buy a home.<\/p>\n<p>&#8216;Faster growth in earnings has supported a faster pace of rental growth. The supply-demand imbalance in rented housing is not going to disappear in 2024 &#8211; however, the market is set to become more balanced than it has been in the past three years.<\/p>\n<p>&#8216;The slowdown in rental growth in 2024 will be down to a weaker labour market, slower earnings growth and growing affordability pressures limiting the pace at which rents can rise, particularly in southern England.<\/p>\n<p>&#8216;Rents have room to rise above the UK average in regional cities where affordability is less of a constraint, but this won&#8217;t be the case indefinitely.&#8217;<\/p>\n<p><img decoding=\"async\" class=\"aligncenter\" src=\"https:\/\/img.thisismoney.co.uk\/i\/buttons\/mortgages.png\"><br \/>\nSource: <a href=\"https:\/\/www.dailymail.co.uk\/property\/article-12850547\/Red-hot-rental-market-set-cool-year-tenants-simply-wont-able-afford-asking-prices-says-Zoopla.html\" target=\"_blank\" rel=\"noopener\">Read Full Article<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Red-hot rental market set to cool next year as tenants simply won&#8217;t be able to afford asking prices, says Zoopla<\/p>\n","protected":false},"author":2,"featured_media":85450,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v21.8 - 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