Over the past few years, the UK rental market has experienced significant fluctuations, with rents increasing dramatically during the Covid-19 pandemic. Between 2020 and 2022, demand far exceeded supply, driving rents to unprecedented levels.  

In the North West for example, the average rent has risen from £803 per calendar month (PCM) to £1,076pcm YTD in 2024. 

However, the last 12 months have seen a slight increase in the number of properties available for rent, both nationally and regionally, leading to a more balanced market. This article will explore these trends and see if the same is happening in Lancaster. 

National and Regional Trends in Buy-to-Let 

Nationally, the rental market has shifted notably in the last 12 months. Pandemic-driven factors, like the migration for more space and new housing developments popping up, surged rental prices. As restrictions eased, the market began stabilizing. Recent statistics show a slight increase in rental property supply, tempering rent rises.

In April 2023, 87,592 UK rental properties came on to the market. This number increased by 14.86% to 100,614 in April 2024. 

Regionally, the North West is just slightly behind this national trend where 7,945 rental properties came on the market in April 2023. This increased to 8,741 rental properties in April 2024, a rise of 10%. 

In April 2023, the average rent achieved for a new UK rental property was £1,641pcm. The average rent increased by 8% to £1,772pcm in April 2024.  

The increased availability of rental properties has brought some relief to tenants, who had been grappling with steep rent hikes of +20% per annum for some types of properties. Despite this increase in supply, the demand for rental properties remains robust, ensuring that rental yields continue to be attractive for landlords. 

The North West is also slightly behind this national trend in rent increases. The average for those new properties that came on the market in April 2023 was £1,019pcm. This increased to £1,061pcm for those that came on the rental market in April 2024, a modest rise of 4.1%. 

The Lancaster Rental Market 

In Lancaster, post-pandemic years 2021 and 2022 saw rents surge due to a significant supply-demand imbalance. To examine if this trend continued, an analysis of the first four months of 2023 and 2024 was conducted. This broader timeframe was chosen to provide a more reliable dataset than just comparing single months.

The findings show that in the first four months of 2023, 384 rental properties were listed with an average rent of £813 per month. In the same period in 2024, 381 properties were listed, with the average rent increasing to £969 per month, marking a 19.2% rise in rent.

Why Lancaster Buy-to-Let Remains a Strong Investment 

Despite the recent market adjustments, Lancaster remains a compelling investment opportunity for several reasons: 

1. Strong Rental Demand: Lancaster’s attractive location, good transport links, and quality of life make it a desirable place to live, ensuring a steady stream of potential tenants.

2. Affordable Property Prices: Lancaster offers relatively affordable property prices, solid rental yields, and stable long-term capital growth, making it appealing for buy-to-let investors.

3. Economic Growth: Lancaster’s ongoing infrastructure and amenity developments enhance residents’ quality of life and boost the rental market by attracting more people.

4. Long-Term Investment Potential: The rental market’s recent stabilization indicates potential for consistent rental income and capital growth over time.

Addressing Lancaster Tenant Concerns 

It’s important to address Lancaster tenants’ concerns about recent rent increases. These rises have generally aligned with inflation rates since 2016, meaning real-term rental costs haven’t increased disproportionately.

The slight increase in rental supply offers hope for more competitive prices and better housing options. Landlords should maintain good relationships with tenants through fair and transparent practices.

The Future of Buy-to-Let in Lancaster 

The Lancaster buy-to-let market is set for continued stability and growth. Landlords should expand their portfolios, taking advantage of strong demand, affordable prices, and the city’s economic prospects.

Now is an ideal time to enter the buy-to-let market, with national and regional rental price stabilization indicating a mature and sustainable market. New landlords in Lancaster can benefit from attractive rental yields and long-term house price growth.

At JDG we like to stay informed on rental trends so we can keep our local landlords and tenants better informed!

Thanks for reading

Josh