Renting has become even tougher in the last few months with the cost of living increasing and rent costs continuing to climb. Whilst competition has always been fairly fierce amongst rental homes in Manchester, demand and low stock have now pushed prices to the highest level in 16 years.
Average asking rents outside of London have now hit another record high, and Manchester is no exception. The average cost to rent in the city has reached a peak of £1,127 per month, which is the highest annual rate that Rightmove has recorded in 16 years.
Rents in Manchester have risen by 23.4 per cent in the last year alone, with the average asking rent per month recorded at £913 in the second quarter of 2021.
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And across the UK, Rent costs have now risen by 19% on average since the pandemic began two years ago. By contrast, it took eight years pre-pandemic to reach the same level of growth, illustrating the rapid rise in asking rents since the start of the pandemic.
Rightmove say that rising rents continue to be driven by a shortage of available rental stock, with low volumes struggling to meet high tenant demand over the past two years. Although there is still a shortage of available homes to rent, there continue to be signs of this improving as the property firm says that the number of new rental listings is up 8% since the start of the year.
But, the total number of rental homes available is still down by 26% compared to this time last year, while demand is up 6%, which means competition between tenants remains extremely fierce.
As high demand continues to overtake last year’s exceptional levels, and available rental stock is slow to recover, Rightmove now expect average asking rent growth to reach 8% by the end of the year, up from 5% predicted at the start of the year.
Affordability analysis from Rightmove shows that due to historically low interest rates, average mortgage payments on properties with two-bedrooms or fewer have risen by 13% in the last ten years, while equivalent rental payments on the same properties have risen by 40%.
They also say that more landlords are planning to expand their property portfolio rather than reduce it, which shows a sign of confidence in the market. A third of landlords recently surveyed said they plan to expand their portfolio during the next 12 months.
Rightmove’s director of property science Tim Bannister said: “The story of the rental market continues to be one of high tenant demand but not enough available homes to meet that demand.
"Last year we saw exceptional numbers of tenants looking to move and this year we have seen no let-up in this trend. Whilst stock levels are beginning to improve, with June seeing the highest number of new rental listings coming to market so far this year, the wide gap that has been created between supply and demand over the last two years will take time to narrow.
"Until then, this imbalance will continue to support asking rent growth. This has led to our revised forecast of a 8% rise in asking rents by the end of the year up from 5%.”
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