Renters flock to cities

19th May 2021

By Will Leyland

The headline runs somewhat counter to the current narrative speculating that many renters are evacuating cities en-masse in order to settle in quieter, more rural surroundings. However, as more and more evidence is collected about renting habits post-pandemic, the clearer it becomes that this is certainly not the case.

The pandemic has, in many ways, realigned people’s priorities when it comes to housing. It’s true that certain demographics have been looking to move out of urban areas, however, this seems to have been hugely over-exaggerated by the media.

One thing we can say for certain is that, despite a pandemic and recession, UK property did remarkably well in holding and increasing its value, whilst also driving demand to almost historic highs.

The same certainly couldn’t be said of other European markets or the US market and is testament to the market’s incredible durability over the course of the past 18 months.

So, if renters aren’t flocking out of the cities as we’ve been told, where are the moving to and why?

Back to the city

According to a BBC report, “Tenants are showing signs of returning to major cities. There was a two-speed rental market over the last year, according to the Zoopla figures. Outside London, rents rose by 3% in the year to the end of March.”

Gráinne Gilmore, head of research at Zoopla, said “The opening up of the economy and the slow return to business as usual as the vaccine rolls out means [rental] demand will continue to build over the summer as more people move to rent their first property - although, as ever, this will be dependent on the economy opening up in line with the planned timetable.”

Despite expectations, many younger renters are in fact looking to move into the city in big numbers. The reasons for that may vary but, as alluded to by Gilmore, the more things change the more they stay the same – quite the paradox.

Landlords and the city

Whilst there had initially been some anxiety from landlords and investors that demand may drop in urban centres, that worry appears to be unfounded.

Trends that saw prices, demand, yields and rents rise over the past year are set to continue, and certainly in cities and urban centres.

That being said, there has been a noticeable and marked increase in interest and demand for city centre properties from investors, so the chances are that if you’re thinking of expanding your portfolio around the city or even in larger towns, you’ll face fairly stiff competition.

For this year the advice would be to move quickly if you’re interested in creating or expanding a property portfolio as demand is showing no signs of abating and, with yields and rents set to continue in their growth competition could, if anything, grow fiercer still.

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Renters flock to cities

19 May 2021

The headline runs somewhat counter to the current narrative speculating that many renters are evacuating cities en-masse in order to settle in quieter, more rural surroundings. However, as more and more evidence is collected about renting habits post-pandemic, the clearer it becomes that this is certainly not the case.

The pandemic has, in many ways, realigned people’s priorities when it comes to housing. It’s true that certain demographics have been looking to move out of urban areas, however, this seems to have been hugely over-exaggerated by the media.

One thing we can say for certain is that, despite a pandemic and recession, UK property did remarkably well in holding and increasing its value, whilst also driving demand to almost historic highs.

The same certainly couldn’t be said of other European markets or the US market and is testament to the market’s incredible durability over the course of the past 18 months.

So, if renters aren’t flocking out of the cities as we’ve been told, where are the moving to and why?

Back to the city

According to a BBC report, “Tenants are showing signs of returning to major cities. There was a two-speed rental market over the last year, according to the Zoopla figures. Outside London, rents rose by 3% in the year to the end of March.”

Gráinne Gilmore, head of research at Zoopla, said “The opening up of the economy and the slow return to business as usual as the vaccine rolls out means [rental] demand will continue to build over the summer as more people move to rent their first property - although, as ever, this will be dependent on the economy opening up in line with the planned timetable.”

Despite expectations, many younger renters are in fact looking to move into the city in big numbers. The reasons for that may vary but, as alluded to by Gilmore, the more things change the more they stay the same – quite the paradox.

Landlords and the city

Whilst there had initially been some anxiety from landlords and investors that demand may drop in urban centres, that worry appears to be unfounded.

Trends that saw prices, demand, yields and rents rise over the past year are set to continue, and certainly in cities and urban centres.

That being said, there has been a noticeable and marked increase in interest and demand for city centre properties from investors, so the chances are that if you’re thinking of expanding your portfolio around the city or even in larger towns, you’ll face fairly stiff competition.

For this year the advice would be to move quickly if you’re interested in creating or expanding a property portfolio as demand is showing no signs of abating and, with yields and rents set to continue in their growth competition could, if anything, grow fiercer still.

Will Leyland

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