Rents on the rise – UK rental demand increase by 10% in Q3

Estate and lettings agent Barrows and Forrester recently explored the rental demand across the nation during the third quarter of the year.

Using the data from the Barrows and Forrester Rental Demand Index, the level of demand was analysed. 

An average demand score for 23 major cities across the nation was based on where the highest number of properties have already been let. 

Rental demand continues to rise

Overall, the research shows that rental demand continued to rise in most major UK cities throughout Q3. 

During the third quarter of this year, rental demand averaged 42.9% - a 9.9% increase in comparison to figures from the previous quarter and 6.8% higher than this time last year.

Over the past few months, many workers have returned to the office after working from home since March 2020. This change is one of the main driving factors for a greater demand for rental homes within major urban areas. 

Managing director of Barrows and Forrester, James Forrester, further explains: “There have been numerous indicators of late that the UK rental market is starting to once again find its feet after one of the most difficult periods in recent times.

"The demand for city rental homes, in particular, was heavily impacted during the pandemic and as a result, many landlords were forced to stomach a significant decrease in rental income in order to secure a tenant.

"However, this is starting to change and we’re seeing a notable uplift in demand for rental properties across many of the nation’s major cities.

"We expect to see a further boost over the coming months as many tenants look to secure a property ahead of the new year and a fresh start.”

The cities that are in the most demand

Rental demand rose by 22.1% in Cardiff and Glasgow, meaning these two cities had the largest quarterly uplift.

Bristol rose by 21% and Edinburgh went up by 21.5%. Other cities that made it to the top 10 include Manchester (14.8%), Newcastle (11.2%), Southampton (10.9%), Plymouth (10.8%), and Birmingham (10.5%).

The only city to have seen a decline in demand during the third quarter of the year was Newport, as it declined by 5.2% in comparison to the previous quarter. 

Five cities have seen demand in the third quarter of the year drop lower than this time last year. Belfast has seen the largest decline at 40.9%, with Nottingham (3.5%), Portsmouth (3.3%), Liverpool (2.9%), and Plymouth (0.4%) also seeing a drop.

Cardiff, Cambridge, Edinburgh, Manchester, Bristol, Glasgow, and Birmingham also rank within the top 10, showing that annual tenant demand in these cities also remains high.