Rental demand has returned to city centres

Rental demand has returned to city centres

It was only a matter of time before we would see headlines about the grand return of inner city living, and as expected, it seems to be coinciding with the end of the lockdown as the country returns to pre-pandemic life.

In the last 12 months or so, there were lots of reports about a so-called ‘city exodus’ where renters and homebuyers were leaving urban areas in their droves in favour of rural areas. This was mostly driven by the national lockdown, which left many of the main attractions of city centres, including hospitality venues and shops, closed for large periods, and working from home had become the norm, so no one was commuting to their offices. This meant that a lot of the things that made city centres attractive were now redundant and many people didn’t feel the need to stick around.

There was a lot of talk about city centre living being out of fashion for good, now that people were looking to be working from home indefinitely and were getting a taste for country life where they could maybe afford bigger properties and a garden. However, as the so-called ‘Freedom Day’ rapidly approaches, newly released data is quickly proving that this won’t be the case for much longer and city centres are, reportedly, popular with renters again.

In research by the lettings agency Barrows and Forrester that looked at rental listings across all major portals, it was found that properties in urban areas had the highest number of properties already let as a percentage of all rental listings. The research analysed 23 major UK cities across the UK including London, Manchester and Bristol, and looked into how the demand had increased from the same period in 2020.

On average, it was found that rental demand across inner city areas had a 33% share in rental demand throughout Q2 2021, which is a 10% increase from the same period in 2020. In addition to this, 12 out of the 23 cities saw an uplift well into double figures. Only three cities saw a decrease in their rental demand – these were Belfast (-12%), Plymouth (-4%) and Nottingham (-1%).

James Forrester, Managing Director of Barrows and Forrester said: ‘A string of national lockdowns and the many restrictions that came with them caused rental demand to dwindle across the UK’s major cities during much of 2020.

“However, the vaccine rollout and a return to the workplace have all played a part in reviving the rental market and we’re now starting to see market activity climb in all but a handful of locations.

“This will come as welcome news to the UK’s landlords, many of which have had to drop rents in order to secure some form of income during the pandemic. There’s a very real feeling that normality is starting to return and with so many reliant on the rental sector in order to live, we expect demand to continue to climb for the remainder of the year.’

City living was never going to permanently fall out of favour with renters – as we return back to normal life, everything that makes city centres attractive to renters, such as the bars, restaurants and career opportunities, will be back in full force, which means that many renters will be returning to city centres in their droves. Not to mention that many young people will be moving out of their family homes and will be looking at city centres as their first choice. This is ideal for investors, who should look at inner-city locations and make the most of the growing demand there.

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