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Major cities seeing increase in rental demand, Birmingham leads the way

Rental demand is soaring in the UK’s major cities as lockdown restrictions ease. Birmingham in particular has seen the most significant increase in demand from tenants.

The rental market across the UK’s major cities has seen an increase in tenant demand as lockdown restrictions are lifting. Rental demand has risen by 10.4% to 37.6% for the first quarter of 2021. This is according to The Rental Market Demand Review by estate and lettings agent Barrows and Forrester.

This data is based on the number of properties already marked as let agreed as a percentage of homes listed. Some city centres saw demand decrease during the successive lockdowns in the wake of the COVID-19 pandemic. Additional analysis by Rightmove shows there has been a whopping 126% rise in enquiries for city centre rentals year-on-year.

James Forrester, managing director of Barrows and Forrester, says: “It’s been a very tough year for landlords and many have seen their rental income reduce due to tenants falling on tough financial times, while others have struggled to find a tenant in the first place.

“As a result, early signs of rental demand returning to the market will be very welcome indeed and, as we ease out of lockdown, this is a trend we will hopefully see increase throughout the remainder of the year.”

Birmingham seeing strong demand

Birmingham has been home to the largest increase in rental demand from Q4 2020 to Q1 2021 with a 25.2% rise. During the first quarter of the year, 46.7% of properties on the rental market are being snapped up by tenants.

Data from Rightmove also shows rental enquiries increased by 51% in Birmingham. City centre living has become more attractive with lockdown restrictions easing. Restrictions are continuing to ease from now until 21st June. Demand for city centre properties will likely increase further in the coming months.

Additional data from ARLA Propertymark’s February Private Rented Sector Report reveals the West Midlands had the highest number of new prospective tenants registered per branch with an average of 126. As the powerhouse of the Midlands, Birmingham and the surrounding area are a big part of the region’s rental market.

Demand high from students and young professionals

For the last five years, demand at all five major universities in Birmingham has remained high. Additionally, as the regional startup capital for seven years in a row, Birmingham has become particularly attractive for young professionals. Because of this, the build-to-rent and purpose-build student accommodation sectors have remained strong, even throughout COVID-19.

Research from Cushman & Wakefield shows Birmingham has the largest regional pipeline of purpose-built student accommodation with 6,700 beds. The data shows there are 25,672 bed spaces in the city for the 2021/22 academic year.

With students and young professionals a significant part of the Birmingham rental market, demand is expected to continue to increase in the city. With a new academic year around the corner and lockdown restrictions continuing to ease, the rental market will likely see a boost in the coming months.

James Forrester comments: “The green light for some university students to return and the fast-approaching start of a new academic year should further boost this initial increase in demand and so things are certainly starting to look up for the UK rental sector.”

At BuyAssociation, we have a number of property investment opportunities across Birmingham and other major cities in the UK. Sign up for early access to our best deals, or contact us for more information.

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