Over the past three years, parts of the UK rental market have seen a huge surge in tenant demand, and three of the top 10 hotspots can be found in Greater Manchester.
A ranking of the busiest rental markets in the UK for the past 12 months by Rightmove has pinpointed a number of areas where tenant enquiries have been higher than ever, making them key investment hotspots for buy-to-let landlords.
Top of Rightmove’s list was Wrexham in North Wales, where the average number of tenant enquiries per available rental property has soared from eight in 2019 to 56 in 2023 – meaning the rental sector there is now seven times busier than it was three years ago.
However, Greater Manchester has seen the biggest difference when it comes to sheer demand for rental homes, with three locations appearing in Rightmove’s top 10 list: Stockport, Salford and Tameside. Tameside and Stockport were the third busiest markets, while Salford was seventh on the list.
Stockport’s figures increased from 14 tenant enquiries per property in 2019 to 48 in 2023; Tameside increased from 14 to 48; and Salford rose from 10 to 46.
Strong prospects in Greater Manchester
As Rightmove points out, some areas have simply seen a surge in popularity among tenants for a variety of reasons, while others have seen the number of rental properties decrease. In Greater Manchester, tenants can often get more for their money than in the city centre, so places like Stockport are becoming more popular.
Whatever the reason for the rise in the number of tenants looking at each rental home, the result is that prices in the private rented sector have been rising considerably in some areas, including many parts of Greater Manchester.
Recent research from Homelet found that the average UK rent increased by 8.9% between November 2022 and November 2023, with the average price of a new tenancy now sitting at £1,279 according to Homelet’s latest figures. Yet some areas have seen higher than average price rises.
The north west – which encompasses Greater Manchester – is one of these areas, where rental prices have increased by 9.1% between November 2022 and November 2023. During the same period, rental prices in Yorkshire and the Humber went up by 10.1%.
However, when comparing the monthly average cost to other parts of the country, the north west remains one of the more affordable regions, with monthly rent coming in at an average of £1,014. In Greater London, this rises to £2,174.
Will the market continue to accelerate?
Since the pandemic, much of the UK has experienced double-digit rental price hikes as a result of heightened tenant demand – more people are continuing to rent for longer, while there is evidence that some landlords have been selling up. A number of those selling may be capitalising on their property assets as they reach retirement, while others may have been put off by taxation, legislation or other recent changes to the sector.
The outlook for the market in the near term is that rents will continue to increase due to demand continuing to outstrip supply. However, it is widely expected that the level of acceleration we have seen over the past couple of years will slow down.
For example, Rightmove’s forecast points towards a 5% increase in rental values by the end of 2024 outside of London, while the capital could see rents rise by 3%. However, the country’s strongest markets, including many parts of Greater Manchester, are likely to buck the trend as tenant demand shows no signs of abating.
Tim Bannister, Rightmove property expert, said: “The balance between supply and demand has been slowly improving this year, and while it will likely be a long time yet before we reach the more normal market levels of 2019, the early signs of improvement are promising heading into 2024.
“The increase in available homes for rents we’re seeing is likely to be a combination of some longer-term leases agreed during the pandemic years coming to an end, some new developments across the country being converted into rental homes, some landlords choosing to sell up, and also other landlords now returning who temporarily switched to the short-let market.”
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