After 15 consecutive months of falls, with rents down by 10pc at the beginning of 2021, London’s market is yet to recover to pre-pandemic levels. But Zoopla noted a resurgence in recent months: the number of agreed tenancies in the city during July, August and September were 50pc above the five-year average.
Gráinne Gilmore, of Zoopla, said: “Households looking for the flexibility of rental accommodation, especially students and city workers, are back in the market after consecutive lockdowns affected demand levels in major cities.”
Areas with the highest levels of rental growth are largely the most affordable regions, and so have more room for rents to increase. Bristol recorded the fastest growth, at 8.4pc, followed by Nottingham and Glasgow.
Rising rents and the acute shortage of properties have also been attributed to landlords exiting the market under increasing regulatory pressure in recent years. Zoopla warned rental stock would likely “remain tight” because there are fewer investors in the sector. Rents are forecast to rise by a further 4.5pc by the end of next year.
Landlords in England must now abide by 168 pieces of legislation, a rise of 40pc over the past decade, according to the National Residential Landlords Association, a trade body.
Since 2016 investors have had to pay a three percentage point stamp duty surcharge on buy-to-let purchases in the UK. This tax change, and the tapering of mortgage interest tax relief on buy-to-lets which followed soon after, is thought to have forced a quarter of a million to sell up and exit the market.