Letting market predictions 2022

There are lots of positive signs for the rental market in 2022 based on how the year closed in 2021. We’re going to look at rental prices, demand and growth of the lettings market going forward.

Demand for letting properties

The market has been driven by a continued supply and demand imbalance. The property website Zoopla reported at the back end of last year that demand continues to outstrip supply which in turn is exerting an upward pressure on rents. There is no doubt that Covid and lockdown had an impact on this as post lockdown provoked an immediate demand which of course took a toll on supply. In the same way that it has impacted the sales market, the so-called race for space has also been a driver in demand on the rental side.

Workers drive demand

In a city like London, people not going into work was a huge factor in the rental market. With such unforeseen uncertainty brought by the Covid pandemic, the hope is we’re through the worst in the London lettings market. We saw at the back-end of 2021 workers return to business pushing up tenant demand and rental values. The profile of workers in the city may shift slightly towards single households, but the fact remains workers are returning in their droves boosting the market. Return of overseas students and workers is another factor in a boost in the rentals market. Add in those that took advantage of the stamp duty window to sell their property and now living in family sized lets whilst they wait to source the right forever home.

Rental price boom

The end of furlough and a slow return to the office, have combined to push up the requirement for letting properties. This in turn means that there are encouraging signs for landlords on rental pricing. In addition to this there are predictions on a build to rent boom with some focus on single family and individual properties. The bigger players such as Lloyds and John Lewis and partners are diversifying in portfolios from commercial property into the build to rent sector. It’s an encouraging signal to landlords that there is growth and strength in the sector of the market. Desire for rental accommodation in London looks set for a 3.5% growth rental growth with suggestions rents could exceed pre-pandemic levels. Students and city workers plus individuals and single households look to be the main drivers for the coming year in the rental market.