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Zoopla UK Rental Market Report – March 2023

Research and Insight March 2023
Top insights
Executive summary
Rental inflation has slowed to 11.1%, from a high of 12.3% in mid-2022
A strong labour market and record immigration drove demand in 2022. Private rented housing supply has grown just 1% since 2016
Higher mortgage rates have further weakened the economics of investing for landlords, impacting new investment in rental supply
Landlords ‘searching for yield’ to offset rising costs will push some to let into different sectors of the private rental market
The growth in overall rental supply is set to remain limited in 2023. Demand is expected to remain above average but lower than 2022
Rental inflation for new lets will slow to 4-5% by the year end. The slowdown could be rapid in inner London and other city centres.
Currently
10 %

Annual rental inflation for new lets, UK

Relative to the 5-year average
30 %

Rental demand

2016 - 2021, GB saw
20%

Increase in number of private rented homes

Currently

The demand for renting was incredibly strong in 2022 helping push rents up by 11%. Rents will continue to rise over 2023 but at a slower rate as demand moderates and affordability pressures start to bite harder on renters.

Source: Zoopla Research
% change, 4 weeks to March 2023 compared to the 5-year average. Source: Zoopla research.