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Rental demand climbs 6% across the UK’s major cities

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Innovative lettings management platform, Bunk, has released it’s latest look at the UK rental market and which cities are most in-demand amongst tenants and where has seen the largest uplift since Q2. 

Bunk’s index looks at rental listings across all of the major property portals, taking an average demand score for the nation’s major cities based on where has the highest number of properties already let as a percentage of all rental listings.

The research highlights where the highest level of tenant demand currently is based on this supply/demand ratio.

The UK

The latest data shows that rental demand is up 6% quarter to quarter across the UK’s major cities and for the second quarter in a row, Bristol tops the table as the most in-demand location for rental properties. Tenant demand in Bristol is currently at 67.6%, having increased a further 17.5% since Q2.

Nottingham ranks second with demand for rental stock at 54.3%, followed by Cambridge with a demand score of 50%, as well as Bournemouth (42.9%) and Portsmouth (42.8%). 

These five cities also account for the largest increases in tenant demand since Q2, with increases of between 11.2% and 18.7%. 

Aberdeen remains the least in-demand city for rental demand at 8.9%, with Edinburgh (14.8%) and Newcastle (16.5%) also propping up the bottom of the table.  

London 

London rental demand has shot up 8.2% since the second quarter of 2019 with Lewisham topping the table as the most in-demand borough at 48.4%. Bromley (46.2%), Bexley (43.7%), Havering (43.7%) and Islington (43.3%) are also amongst the most in-demand boroughs for tenant demand in Q3.

Islington has also seen the largest uplift in rental demand quarter to quarter, up 17%, while Sutton is the only borough to see a drop since Q2 – down -0.7%.

Kensington and Chelsea, Westminster and Camden are the boroughs home to the lowest level of current tenant demand at 13.4%, 15.4%, and 22.3% respectively.

Co-founder of Bunk, Tom Woollard, commented:

“We continue to see the UK rental sector acting as the backbone of the property market with demand for rental properties climbing yet again.  

With the start of the university term, it’s no surprise that some of the UK’s most prominent university towns have seen some of the largest uplifts in rental demand as thousands of students look to secure a place to live while studying.

For buy-to-let landlords, it remains one of the most prominent factors when deciding where to invest in a property and it’s clear why. While you can have the best yields around, they’re not worth a penny without the tenant demand to fill a property and this demand is abundant around the likes of Bristol, Notts, Cambridge, and Bournemouth.”

Top Line Q2 Q3 Change
UK Cities 25.2% 31.2% 6.0%
London 21.4% 29.6% 8.2%
       
Major UK Cities Ranked by Quarterly Demand Change
City Q2 Q3 Change
Nottingham 35.6% 54.3% 18.7%
Bristol 50.1% 67.6% 17.5%
Cambridge 33.5% 50.0% 16.4%
Bournemouth 30.3% 42.9% 12.6%
Portsmouth 31.6% 42.8% 11.2%
Glasgow 25.4% 35.1% 9.7%
Leeds 15.5% 24.1% 8.6%
London 21.4% 29.6% 8.2%
Manchester 26.4% 32.7% 6.3%
Birmingham 23.1% 28.9% 5.9%
Southampton 24.0% 29.6% 5.6%
Liverpool 18.3% 22.9% 4.6%
Leicester 24.7% 29.1% 4.4%
Newcastle 13.9% 16.5% 2.6%
Plymouth 34.5% 36.4% 1.9%
Swansea 16.3% 17.9% 1.6%
Sheffield 22.0% 23.5% 1.5%
Newport 38.7% 40.1% 1.5%
Aberdeen 8.0% 8.9% 0.9%
Edinburgh 14.3% 14.8% 0.5%
Oxford 29.0% 28.8% -0.3%
Belfast 21.2% 20.9% -0.3%
Cardiff 21.1% 19.7% -1.3%
       
London Boroughs Ranked by Quarterly Demand Change
London Borough Q2 Q3 Change
Islington 26.3% 43.3% 17.0%
Lambeth 26.2% 41.7% 15.5%
Hackney 27.3% 41.4% 14.1%
Tower Hamlets 24.1% 36.3% 12.2%
Southwark 30.9% 41.5% 10.6%
Haringey 30.3% 40.2% 9.9%
Newham 28.1% 36.8% 8.7%
Enfield 27.1% 35.5% 8.4%
Barnet 19.8% 28.1% 8.3%
Greenwich 32.9% 41.0% 8.1%
City of London 21.1% 28.9% 7.8%
Brent 19.8% 26.7% 6.9%
Hammersmith and Fulham 17.4% 24.2% 6.8%
Wandsworth 29.6% 35.9% 6.3%
Westminster 9.7% 15.4% 5.7%
Lewisham 43.0% 48.4% 5.4%
Hillingdon 27.7% 32.5% 4.8%
Camden 17.9% 22.3% 4.4%
Kensington and Chelsea 9.1% 13.4% 4.3%
Bromley 42.0% 46.2% 4.1%
Bexley 40.1% 43.7% 3.6%
Ealing 21.2% 24.5% 3.3%
Harrow 22.9% 25.7% 2.7%
Merton 37.3% 39.9% 2.6%
Barking and Dagenham 31.2% 33.1% 1.9%
Croydon 36.1% 37.9% 1.8%
Richmond upon Thames 28.1% 29.6% 1.5%
Waltham Forest 38.7% 40.0% 1.3%
Hounslow 25.6% 26.8% 1.2%
Redbridge 31.0% 32.2% 1.1%
Kingston upon Thames 30.7% 31.8% 1.1%
Havering 43.2% 43.7% 0.5%
Sutton 42.5% 41.8% -0.7%

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Cost of maintaining a buy-to-let hits £12k a year in parts of the UK

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Leading property management platform, Howsy, has looked at the cost of maintaining a buy-to-let property each year and how this varies across the UK.  

Buy-to-let can be a tricky business if you don’t tackle it properly and there are a whole host of costs that can trip up the amateur investor. From the more obvious additional three percent stamp duty tax, to various other tax implications, void periods, mortgage costs, agency fees, the cost of finding a tenant, and more, Howsy’s previous research shows the average buy-to-let brings an annual return of just £2,000.

With the Government’s continued attack on UK landlords, making the most out of your investment financially can be tough and even when you consider all financial commitments for a property, many can still be caught unaware by out of the blue maintenance and repair costs. 

Buy-to-let landlords should squirrel away savings in anticipation of these events and an industry rule of thumb is an annual budget equivalent to 1% of your property’s value. 

So what does that equate to?  

Across the UK landlords should be tucking away an annual budget of £2,344 to cover repairs and maintenance, with this rising to £4,746 in London, with the North East home to the lowest repair costs at just £1,328. 

Of course, markets with higher rent returns may seem promising from an investment standpoint but the higher the reward, the higher the cost when things do go wrong. In Kensington and Chelsea, this annual 1% saving climbs to an eye-watering £12,292, hitting nearly £9,000 in both the Cities of London and Westminster.  

Outside of London, South Bucks and Elmbridge are home to the most expensive buy-to-let maintenance costs at £6,091 and £6,019 respectively.

Head to the likes of Burnley or Blaenau Gwent however, and this yearly maintenance budget drops to less than £1,000 a year.

Founder and CEO of Howsy, Calum Brannan, commented: 

“The buy-to-let sector can be a minefield for the amateur investor and now more than ever, it’s imperative that you do everything you can to maximise the return on your investment.

While technology now allows a greater level of control and service when managing your investment at a lower cost via online platforms, it isn’t just about the financial side of things. Providing a fit for purpose property is not only a legal requirement but essential to ensure a happy tenancy and a reduction in void periods.

Of course, things can go wrong and having the budget available to fix them is a must. In the worst-case scenarios, a cash pot equal to one percent of your property’s value might not be sufficient, but it should cover you for most eventualities and is a good benchmark to start on.

As with all buy-to-let investments, good preparation, organisation, and education are key, and whether you go it alone or have a great management agent if you stay on top of things, a bricks and mortar investment is still one of the best you can make.” 

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