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The return of the urban rental market

In our latest report, we look at trends in city and town centres and show how landlords have increased acquisition activity in urban postcodes over the past year.

Richard Rowntree

Richard Rowntree
Managing Director for Mortgages

March 2020 - our city centres were emptying. People were quickly looking to escape the confines of urban life, searching for space, greenery and an alternative to an unknown future of living in apartments or small houses with little access to outside gardens.

Hundreds of thousands of renters returned to the childhood bedrooms of their parents’ houses in the shires or flew home overseas to be back with loved ones at a time of panic and fear. Families packed up and shipped out.

For landlords, it was a challenging and worrying time. A lack of tenant demand was compounded by the short-term holiday lets market converting to long-term rentals as tourists and weekend visitors dried up.

urban rental

Nearly two years later, the situation has turned on its head. Our report shows how landlords doubled purchase of buy-to-let property in urban locations in 2021, and how they are increasingly focusing on smaller, secondary cities and towns.

Those locations that combine some of the benefits of urban living in their own right, but are commutable to larger cities if necessary.

In most cities, tenant demand significantly outweighs available supply, most notably in London.

Tenants are competing for property via sealed bids and rents are being forced up. The return to the office is one of the factors behind this, but a form of normality and a desire for the excitement that city living can offer - particularly for younger tenants - has drawn people back.

Supply of rental property in cities is an issue. Property disposals and the move back into 'AirBnB' style lets means that rental property is scare.

This report examines some of the trends we have seen in recent months and offers some insight into what we are seeing on the ground, what properties landlords are buying, how tenant demand is changing and whether build-to-rent can pick up the slack.

Download the report

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