The Intermediary – July 2025 - Flipbook - Page 43
BUY-TO-LET
Opinion
sector tenants, the risk of missed rent
payments is not increasing.
Third, wage growth remains
positive. In the three months to
March, average weekly wages
rose by 5.6% excluding bonuses,
boosting workers’ purchasing power.
This is particularly significant
when compared to trends in the
rental market.
According to Zoopla, average UK
rents for new lets in April were 2.8%
higher than a year earlier, the lowest
rate of rental inflation since July
2021. With average monthly rents at
£1,287, this translates to a modest £35
annual increase.
The fact that wage growth is
outstripping rental inflation means
tenants are beer positioned to
afford their rent, easing potential
financial strain.
Ebbs and flows
Beyond these factors, landlords can
take heart from the adaptability of
the UK workforce. While retail and
hospitality have faced challenges,
other sectors are showing signs of
growth. The professional services
and technology sectors continue to
expand, particularly in urban hubs
like London, Manchester, Reading
and Bristol.
These industries aract well-paid
professionals who are likely to be
reliable tenants.
The rise of hybrid and remote
working has also broadened the pool
of potential renters, as employees
are no longer tied to living near their
workplace.
This flexibility has increased
demand for rental properties in
outer-suburban and more far-flung
commuter areas, where landlords can
tap into a diverse tenant base.
So, while rental demand might be a
lile so at the moment – according
to Hamptons the number of tenants
registering with them is down 17%
year-on-year – I think it’s likely to
rebound as wage growth empowers
young professional tenants, relatively
new to the workforce, to take the
plunge and move away from home.
This supply dynamic should support
the rental market in the coming
months, particularly in highdemand areas.
Cautious optimism
While the UK jobs market appears
hugely challenging at first glance,
landlords have ample reason to remain
optimistic.
The unreliability of UK jobs data,
the resilience of the public sector,
strong wage growth, and emerging
opportunities in growing industries,
all point to a rental market that
remains robust.
Tenants are beer equipped
to meet their rental obligations,
supported by rising incomes and
Government interventions.
For mortgage brokers advising
landlords, the message is
encouraging: despite the headlines,
the fundamental principles of the UK
rental market remain strong, and
landlords, although adapting and
changing in profile, can continue to
invest with cautious optimism. ●
