The bright lights and big city life have long been an attraction for homeowners and renters alike. Although, this allure did lessen in the early parts of the pandemic as people demanded more space – both internal and external – and many looked to more rural regions.

Urban living enjoyed a resurgence as the pandemic waned, but the old faithful economic cornerstones of supply and demand appear to be bucking this trend once again.

According to recent data from Rightmove, low levels of suitable property, soaring rents, and wider financial pressure caused by increased living costs are fuelling an exodus of renters from cities across Great Britain.

After a relatively quiet December and January for the lettings market, February saw some much-needed momentum return to help generate stronger rents and a significant fall in rental voids.

This is according to market analysis from Goodlord which suggested that strong demand among tenants saw the average void period for a rental property in England drop by 26% in February – from 23 to 17 days. The biggest changes were seen in the North West, where voids went from 27 days in January to just 18 days in February – a steep drop of a third (33%).

Charlotte Harrison, Interim CEO - Home Finance, Skipton Building Society for Intermediaries, shares her market predictions for 2023 and what they may indicate for borrowers, homeowners and first-time buyers.

As I write on what is referred to as “blue Monday” am I feeling that sense of gloom, with Christmas cheer and relaxation a distant memory? Perhaps.

But a little less daunted by what’s to come and instead, relishing a new set of challenges that face us following the backdrop record levels of lending seen in 2022. In my view the outlook for 2023 certainly isn’t all doom and gloom.

So, looking at the year ahead, what can we expect?

To start with, I think it's likely we will continue to see rises in the Bank of England base rate, but that doesn't necessarily mean customer rates are going to increase in the same way.

There have been quite a few doom and gloom merchants over the years when it comes to the future of the buy-to-let sector. Many of these have been largely dispelled by a private rented sector which continues to grow in size, largely due to the extent of ongoing demand and in the wake of a shortage of quality rental homes across much of the UK.

However, with ongoing fiscal pressure being exerted on landlords and mortgage rates much higher than experienced over the past few years, this has led to further questions being asked over landlords’ appetites to add to their portfolios.

In an ageing population, housing demographics are ever-changing.

As the average first-time buyer age rises, so too does demand for a variety of rental properties. In addition, increasing demand from older tenants continues to dispel the outdated myth that the private rented sector is purely the domain of the younger generations. Although this is not a trend which has bypassed the attention of many landlords, with growing numbers realising the benefits attached to having older tenants in situ.

This was evident in newly released data from Paragon which outlined that almost half of UK landlords are prepared to update their property to accommodate the needs of older tenants.

With the cost-of-living crisis hitting people hard in the pocket over the winter period and beyond, energy efficiency is fast becoming a priority for a growing number of tenants.

This trend was highlighted in new research from Shawbrook which revealed that 58% of private renters would be less likely to look at a rental property if they were aware that it had an EPC rating of D or below.

As part of its Confronting the EPC Challenge report, the study found that young private renters are particularly engaged on energy efficiency, with 72% of renters aged 18–34 saying they always check the EPC rating of a property before making any decisions. This is compared to 52% of those aged over 55 years old.