Famous for its scenic countryside, its historic towns and its communities, the South West of England has long been an attractive place to live. However, as the peninsula ticks over into the next year, 2024, the region’s rental market is undergoing radical changes with regard to unlocked – and now rent-rusted – doors. In this article, we will investigate the state of rental affordability in the South West of England, looking at the latest trends and what they will mean for tenants and landlords.
Rising Rental Prices in the South West
One of the biggest regional increases in rental costs over the past 12 months has been in the South West, with some areas experiencing record rents. Annual average rental growth in the South West currently stands at £1,127 per month, up from £1,058 in 2014, according to the most recent HomeLet’s latest Rental Index report. Across the South West, this figure is reflected across much of the region, with key areas such as Bristol, Bath and Exeter enjoying sharp increases.
Factors Driving Up Rents
Several factors are contributing to the rise in rental prices in the South West:
The quality of life enjoyed by the South West is attracting professionals as well as families and retirees, increasing demand for rental properties, especially in areas of high demand in urban areas and those attractive rural locations.
Restricted Supply: Rental supply hasn’t even come remotely close to meeting demand, and tenants are now competing for fewer and fewer properties that are available. The imbalance between supply and demand has also worsened in recent years, due to reduced rates of new property development and a surge of short-term holiday lets, especially in coastal areas.
Economic conditions: Wider economic conditions, such as rising inflation and interest rates, have also made a difference. Landlords with higher costs are often passing those on to tenants in the form of increased rent.
Regional Variations in Affordability
Although rent is rising across the South West generally, cost varies widely according to location.
Bristol and Bath
Bristol and Bath are among the most expensive rental markets in the South West of England. The average Bristol rent is now more than £1,300 a month, and in some of the central areas it’s well over that. Bristol’s more historic neighbour, Bath, is similarly expensive. As you’d expect of a city with such a pre-industrial heritage, rents there are just as high – and in the more up-market areas they are far higher. These days, many tenants can barely find anything below that width.
Exeter and Plymouth
Exeter and Plymouth are priced more favourably in terms of rent compared with Bristol and Bath, though they are also increasing. The average rent in Exeter is £1,100 per month, while Plymouth is slightly more affordable and averages at £950 per month. These locations are popular with both university students and working professionals, therefore the market turns over quickly.
Rural and Coastal Areas
Meanwhile, various areas of the South West, like Cornwall and Devon, have seen sharp COVID-induced increases in rent prices for houses and flats in towns and villages especially popular with holidaymakers. According to Hello Rayo, rent prices around the South West have reached a record high due to an influx of short-term holiday lettings, ‘pricing locals out of the long-term rental market’.
The Impact on Tenants and Landlords
Tenants
For the tenants, the South West has no cheap places to rent, especially for the most popular areas of the South West. Because due to the high cost of living, personal expenses are stretched and the high cost of living, rents are also increasing day by day. Many people want to move to other cheaper regions in Britain to reduce living expenses.
Landlords
So, for many landlords, the high-rent reality is a mixed blessing. Higher rents can mean higher income, but if the affordability crisis is widespread, as it currently is, it might also mean fewer people are able to rent in desirable places. It can also mean for those landlords looking to sell their property portfolio, that there becomes a bigger demand for the pool of potential buyers. Areas with wage increases below cost-of-living increases might face an especially tight squeeze.
As we move through 2024, long-term rental affordability in the South West of England will be an issue. Increasingly expensive housing, together with burgeoning demand, is already putting both tenants and landlords in the South West to the test. The South West remains a great place to live, however, the affordability of renting will continue to shape the way that the market operates in the months and years ahead. Finding a home to rent in the South West of England going forward is likely to involve careful choice of location, as well as smart financial planning and good money management.
