Richard Donnell, executive director at Zoopla, has identified record levels of migration as a key factor exacerbating the current rental crisis in the UK. In a conversation with the Telegraph, Donnell pointed out that for most people moving to the UK, renting is the initial housing option, which has significantly increased the demand for rental properties and contributed to rising rents.
Donnell also highlighted the impact of landlords exiting the sector, a trend driven by tax changes and regulatory reforms, leading to a dwindling supply of rental homes. According to the Office for National Statistics (ONS), net migration to the UK hit a record high of 745,000 in 2022, with nearly 1.3 million people immigrating to the UK in the two years leading up to June 2023, predominantly from non-EU countries.
“We have a triple whammy on the demand side, one element of which is migration,” explained Donnell. He also noted the influx of international students, primarily from India and China, as a contributing factor. With a shortage of purpose-built student accommodation (PBSA), many students are turning to the private rented sector, further straining the already tight market.
Additionally, Donnell mentioned that approximately one in 10 homes listed on Zoopla are being sold by private landlords, emphasizing the stagnant number of private rental homes in the UK, which has remained at around 5.5 million for the past seven years.
He further commented on the housing trajectory of migrants, observing that while some eventually purchase homes, many remain in the rental sector longer than usual due to high interest rates and house prices. Moreover, a strong job market is driving more people to move for work, further bolstering the demand for rental accommodation.
The impact of these factors is evident in the latest ONS data, which shows an 8.4% increase in rents across the UK in the year to October 2023, marking the highest annual growth rate since records began in 2015. The average rent in the UK reached £1,029 per month in October, up from £949 the previous year, underscoring the severity of the rental crisis facing the country.