Prices for properties on the rental market are in constant flux. From supply and demand to current economic conditions, the state of a local community determines the price of properties.

For landlords and prospective tenants alike, it’s worth understanding the key factors behind the disparity seen in rental prices across the UK. We’ve outlined five of the most influential below.

What influences rent prices in the UK?

1.) Economic conditions and labour market

Local economic health correlates clearly with property prices in almost every part of the UK.

In cities and regions with strong economic growth, along with high levels of investment and employment, there’s generally an upwards trend in rent prices. On the other hand, rent prices drop in areas with a stagnant economy, struggling high street or general economic decline.

Nearby employment options play a major role too. Major corporations and large-scale employers attract working professionals to certain areas, which naturally drives rental prices up.

2.) Property age, size and type

The type of building also influences prices significantly: a detached home, for example, is likely to cost more per month than a high-rise flat or studio apartment. In towns and cities where space comes at a premium, the cost of apartment rent might be disproportionately high.

Larger properties with more bedrooms, greater outdoor space and high-quality fittings generally command higher rental costs. Renting is often the least affordable long-term living solution, especially with so many quality new homes available with favourable mortgage rates.

3.) Location

Location is perhaps the most influential factor when it comes to rental prices.

London, Cambridge and Bath are amongst the key cities where rent comes at a premium. With some tenants admitting to working two jobs to afford rent in London, many city dwellers choose to flat share as a short-term solution.

Urban areas with very strong employment opportunities, convenient transport links and family-friendly amenities generally command higher rents. Rural areas with limited amenities or challenging access typically offer more affordable rental options in comparison.

4.) Supply and demand

In areas where there simply aren’t enough properties to meet the demands of prospective tenants, prices tend to be higher. Fierce competition and activity on the market allows letting agents and landlords to be more selective in the application process too.

If there’s an oversupply of rental properties in a particular area, the demand might not be as high. This downward pressure means that landlords might propose special offers as incentives, like inclusive bills or Wi-Fi, or just lower the rental price before letting it out.

5.) Regulations and accessibility

Lastly, while the size, quality and amenities of a property play an important role in pricing, government policies and regulations influence rent prices too.

Changes to landlord taxation, regulations concerning tenant rights, or initiatives to make housing more affordable could all determine the final rental costs for tenants. If you’re struggling to afford rent, try not to feel disheartened. There are so many ways to start renting privately and sign an assured shorthold tenancy that works for you.