The headlines from the latest UK Rental Market Index from Hometrack are:
- The UK is past peak rental growth. We expect annual UK rental growth to halve over 2024 to 5%, the lowest growth since 2021.
- London will lead the slowdown with rents expected to increase by just 2% over 2024 as affordability pressures impact demand.
- Demand is weakening slowly off a high base, down 11% year on year, but still a third higher than the 5-year average.
- There are signs asking rents have overshot in some markets, evidence of growing resistance to higher rents.
- The supply-demand imbalance in rented housing is not going to disappear in 2024 but the market will become more into balanced.
- Rents in regional markets are set to out-perform where affordability is less of a constraint on rental growth.
You can read the full report online for the Rental Market Report December 2023 on the Hometrack website.