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Rental Demand on the Rise as Tenants Return to Cities

Is the race for space slowing down now renters are returning to cities?

Oct 19, 2021

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3 min read

Rental Demand on the Rise as Tenants Return to Cities

At the height of the pandemic, lockdowns saw thousands of renters head out of the city to be closer to family, friends and the great outdoors. Thanks to remote working, renters didn’t rush back into cities even when the first, second and third lockdown were over, which dramatically saw urban tenancies and rents fall.

During the pandemic's first year (April 2020 to April 2021), house prices in villages and off the beaten path grew faster than anywhere else. They were up 9.6% compared to 9% in towns, and 7.8% in cities. The price of flats in towns fell during the pandemic as renters and new buyers were moving away from city centres.

Cities are bouncing back

However, some city centres have not only bounced back from the declines during the pandemic, but they are now outpacing the national average.

Across the country, rents are rising at a fast rate, up 8.6% annually outside of London, with the capital finally showing signs of growth, with rents up 2.7% a year on.

In Birmingham city centre, renters fell by 5% between February 2020 to 2021. By this September, however, the increased demand helped them grow to 10% - higher than before the pandemic hit.

This is a similar picture for Bristol, Nottingham, Glasgow, York, Leeds, Oxford and Manchester. The speed and strength of demand in the letting market have pushed more of a focus on cities outside of London, though the capital is slowly recovering as renters return.

Flats back in fashion

Tenants are no longer looking for poky flats but, instead, are seeking out larger rentals. Multiple lockdowns have seen us fall out of love with squashed spaces. After months of compromising on space both indoors and outdoors, more space is desired. Three and 4-bedroom flats have the hottest competition, while the ‘flats’ market is outpacing the ‘houses’ market in terms of rentals.

In summary

  • Cities are bouncing back with more renters returning to the centres
  • Cities outside of London are seeing a greater uptick
  • Larger flats have hot competition
  • A shift to city centre living is on the horizon – find your next property to rent or start letting your flat on Boomin today