The rental market in the UK is poised for a significant uptick in demand in the coming years, with 2023 shaping up to be a particularly strong year.According to recent statistics, a variety of factors are contributing to this trend, including affordability, flexibility, and demographic shifts.
With the Office for National Statistics stating the average UK house price increase of 9.8% in December 2022 at an average of£294,000, it’s no surprise that tenants have flocked towards the rental market with open arms. This increase in demand has also shown an increasing growth in private rental prices paid by tenants in the UK by 4.4%, reflecting the highest annual percentage change since January 2006.
The UK Rental Forecasts for 2023.
Thanks to investment continuously growing across the country, incredibly so in cities such as London, Manchester, and Liverpool, rental supply is sure to rise again in the future enabling us to suggest rental growth stabilisation in line with long-term correlation with earnings growth to secure a steady market.
Rising average rental prices predicted by Savills in their Rental Forecast for 2023-27 suggest UK rents will have risen to 10.0% by the end of year before levelling to around 6.5% the following, creating an opportune time to invest in buy to let property for anyone with the financial ability to do so.
How Energy Efficiency Will Bring Prosperous Value.
With energy bills on the rise at a dramatic rate across the UK alongside mortgages, energy efficiency is becoming increasingly attractive to tenants, making property investment not only more lettable, but more in demand with the added potential to earn more rent.
A newly passed Bill by the UK government will also mean any property let to new tenants will need to have an energy performing(EPC) rating of C or above by April 2025, something that new builds will ensure for investment security.
The benefits to securing energy efficient measures canal so preserve and enhance the value of a property by reducing unnecessary energy consumption and contributing to the local environment saving on greenhouse gas emissions and the demand for non-renewable resources. To additionally support, the ‘Greener, Cleaner, Cheaper’ report published by the Home Builders Federation found that new homes generate only around one-third of the carbon produced by the average older property each year, weighing favour heavily in the direction of new build developments.
Northern England is quickly growing its investment opportunities with cities such as Manchester, and now Liverpool, rebuilding their skyline, job opportunities, education sector, and much more.
In fact, Liverpool has attracted over £2.5 billion in physical investment in the last five years, and currently ranks in the top 10 in the world for start-up eco systems. The next decade is set to see Liverpool grow even further by delivering some of the UK’s largest and most ambitious development schemes including Liverpool Waters transforming the city’s northern docks, and the New Royal Liverpool University Hospital and Health Campus in the centre of the city’s Knowledge Quarter.
With the demand for living alongside working growing within the city, Liverpool is set to see a surge in opportunities inside the city and on the outskirts as it begins to climb, making it a crucial hotspot for property investors in the UK looking for affordable prices with high yields.
Let’s Discuss Further
If the current forecasts, energy efficiency measures, and ecosystem investment in the North of the UK sounds like a reason for you to invest in the private rental market this year, why not get in touch with one of our specialist sales advisors today to discuss your opportunities? Telephone us today on (+44) 0151 433 2906.