Zero Deposit has highlighted the need for diversity when it comes to the provision of rental stock, with tenant demand driving strong rental growth across all property types in the current market.
Zero Deposit analysed rental price data from the Office for National Statistics (ONS), looking at both the split in rental price performance across each region, as well as how it differs across each property type.
The average rent across Britain climbed by 9.1% over the past year.
This rate of growth differed when breaking the market down at a regional level, with both London (11.2%) and Scotland (10.5%) recording double-digit rates of annual growth, while rents climbed by just 6.1% across the North East during the same time period.
Both London and Scotland were leaders when it came to the strongest annual rate of rental market growth seen across all property types, with the exception of semi-detached homes, as the West Midlands sat in second behind the capital with annual growth of 9.7%.
While there was a high degree of variation from one region to the next, the analysis by Zero Deposit showed that it was a more level playing field when it came to the growth broken down by property type within each specific region.
Across Britain, the average rental price of a detached property increased by 8.6% over the past year, while the average cost of renting a semi-detached home was up 8.7%.
Terraced homes saw a growth of 8.5% and while flats performed the strongest, this rate of growth was only marginally higher at 9.9%.
This means there was just a 1.4% swing between the lowest rate of rental growth (detached homes) and the highest (flats).
However, at a regional level, this gap closed to 0.8% or less across all regions but one.
In Scotland, the rental price of a detached home increased by 12.9% annually, while terraced home rents saw growth of just 9.5%, a difference of 3.3%.
This makes Scotland the most uneven rental market when it comes to growth in rental prices.
In contrast, the North West and East of England were home to the most level rental market playing fields, where the gap in rental price growth between the best and worst performing property types was 0.5%.
Sam Reynolds, CEO of Zero Deposit commented: “Although renting remains a necessity for a great number of tenants, we’ve seen a distinct lifestyle change in recent years whereby many are renting until far later in life out of choice, due to the greater degree of flexibility it allows them.
“Of course, residing within the rental sector doesn’t put life on hold and as tenants reach certain milestones, such as marriage and children, their rental property requirements evolve.
“So it’s hardly surprising that we’ve seen a consistent level of rental price growth across the board over the last year and while flats may be the predominant property type of choice for the majority of renters, there’s certainly a greater degree of demand for larger homes suitable for family life.”
