A new study has found that rising rents, increased living costs and a lack of available properties in urban locations, is leading to a significant proportion of renters leaving urban areas in search of more affordable options further afield.
The study, which should interest all UK property investors, reveals that the exodus from the cities has increased year on year since 2020. In fact, on average 42% of renters are currently looking to move out of a city environment; this figure has increased from 28% in 2020 to 37% in 2022. This marks a clear trend towards more rural living.
The research focuses on ten major UK cities. Looking at a few examples, in Birmingham for instance, 49% of renters reported that they were looking to leave the city in 2023 compared to only 38% in 2020; Manchester, which currently has the highest number of tenants thinking about leaving the city centres experienced a similar pattern, with 54% looking to leave in 2023, compared to 39% in 2020.
According to the research, the biggest driver for this move is financial uncertainty and the rising cost of living, not just a lifestyle change in response to the pandemic. There is also a growing supply and demand imbalance in many urban areas. The largest increase in renters looking outside the city has been observed in London, followed by Sheffield and Manchester, which are some of the areas seeing the largest rent increases. Across all urban areas, average asking rents have risen by 12% compared to 2022, while demand for each available rental property has more than doubled (increasing by 125%) since 2020.
Renters’ search behaviour is changing too. The average geographic area considered by renters has nearly doubled since February 2020, to 122km², reflecting the broader range of locations being explored – not just city centers. These larger areas are now naturally taking in more rural and suburban regions around cities.
So, does this indicate an opportunity for investors to reassess their business strategies to accommodate this change in renters’ priorities? As always, investors are advised to do their due diligence and study their proposed markets closely, to see if there are new opportunities in their areas that they may previously have not been aware of.
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