Editor's note: This brief was summarised by The Property AI Newsroom from a report by Mortgage Strategy. Read the original article for full details.
Rents in Affordable UK Areas Outpace National Growth
Rents in more affordable parts of the UK are rising at twice the rate of the national average, according to the latest index from Zoopla. The report shows that while UK-wide rent inflation slowed to 2.1%, areas with average rents of £750 per month or less saw a 5% year-on-year increase.
Zoopla’s data highlights that demand for rented homes has dropped to its lowest level in six years. The average number of enquiries per rental listing fell to 5.6 in May, down from a peak of nearly 16 in 2022. In more expensive markets, rent increases are being limited by what tenants can afford, but in lower-cost locations, a lack of supply is pushing rents higher.
The fastest rental growth was recorded in Carlisle, where rents rose by 9.1%, followed by Kilmarnock at 9% and Halifax at 6.5%. In contrast, rents fell in several larger markets, including Bournemouth (down 1.7%), Nottingham (down 1.5%), and Birmingham (down 1.1%). Despite the strong growth in some areas, average rents in Carlisle, Kilmarnock, and Halifax remain around £700 per month, which is 45-50% lower than the UK average.
Nationally, rental inflation eased to 2.1% from 2.6% a year earlier. Average earnings are currently rising by 4% annually, meaning wage growth has outpaced rental inflation for the past 18 months. However, supply remains tight, with 20-30% fewer homes available to rent in every UK region and country compared to pre-pandemic levels.
London stands out as the only region to record an increase in rental demand, with enquiries up 6% year on year. Rental inflation in the capital rose to 2.2% from 1.9% a year ago, and average rents now stand at £2,206 per month.
Zoopla expects rental inflation to remain between 2% and 3% for the rest of 2026, but warns that affordability gains could be fragile unless more rental homes come to market.
Source: Mortgage Strategy