Rightmove reveals UK's busiest rental market – where are the buy-to-let opportunities?

Rents outside of London have hit a new record and landlords can still benefit from high levels of tenant demand even amid reform of the rental sector, research suggests.

Landlords may be reconsidering the benefits of buy-to-let amid the Renters’ Rights Bill and clampdowns on tax reliefs when it comes to property investing.

The cost of living crisis and lower mortgage rates have also put a dent in rental growth.

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But Rightmove’s latest Demand Tracker has revealed there are some parts of the country where landlord portfolios can benefit from a large supply and demand imbalance.

Analysis by the property website, based on millions of local data points across more than 250 local authorities, found that Wrexham is the busiest rental market.

While the average number of enquiries across the country is 19 per rental home, some parts of the UK are seeing up to 50 or more in some cases.

This is helping landlords justify higher rents.

Average advertised rents outside London are now a record £1,349 per calendar month and 5% higher than this time last year, Rightmove said.

Angharad Trueman, president of lettings agent trade body ARLA Propertymark, suggests this is due to people looking further afield for places to live.

She says: “With the homeworking revolution now a more widespread part of life, it has given people the flexibility to look further afield to locations that bring additional benefits to their home life such as easier access to countryside or the ability dwell in a more substantial property due to typically lower rental prices away from busy metropolitan areas.”

The areas with the highest level of tenant demand

Despite mortgage rates falling, there are still plenty of people who struggle to get on the property ladder or choose the flexibility of renting.

Tenants have been hit with rent rises due to a lack of supply, which has been exacerbated by landlords exiting buy-to-let amid rising costs and fears of tax rises in the upcoming Budget.

Wrexham has been identified as a tenant demand hotspot by Rightmove, with rents at £967 per month on average.

An average letting agent in Wrexham is currently receiving 54 enquiries for every rental home that comes onto the market, Rightmove said.

Glasgow is second on the list, with an average of 52 enquiries being sent to letting agents per available rental property and typical monthly rents of £1,078.

Bristol is third, with an average of 51 enquiries per property and average rents of £1,658.

Is buy-to-let worth it?

Tax changes and a potential ban on ‘no-fault’ evictions are putting extra pressure on landlords, making many consider if buy-to-let is worth the effort.

While asking rents continue to rise, they are down from the peak annual rate of growth of 12% in 2022 and are at the slowest rate since 2021, according to Rightmove.

Additionally, the number of tenants looking for a new home has dropped by 16% compared to last year, and at the same time, the overall number of available homes on the market has improved by 8%.

That could put further pressure on rental growth. Plus, rental supply remains an issue. The number of tenants looking for a home is still 17% ahead of the more normal pre-pandemic 2019 market, while the number of available rental homes is still 32% behind the same period in 2019.

“Whilst at a high-level there has been an easing in the rental market compared with last year, from speaking with agents, we know that many local markets are yet to feel the effect from these improvements,” says Tim Bannister, Rightmove’s property expert.

“At the same time, prospective tenants are still likely to be experiencing a very hot and competitive market. To be receiving upwards of 50 enquiries per available rental property in some local areas is an astonishing figure, which goes to show the significant amount of work still to be done to improve the balance of supply and demand across different areas of Great Britain.”