UK rents rocket by 11% as lack of supply bites
Rents in the UK have rocketed by 11% to create the most competitive market ever, the latest data reveals.
The findings are in the Quarterly Rental Trends Tracker published by Rightmove who highlight that the rent increase has set a new record.
Outside of London, rents have risen by 10.8% over the past year, that’s the highest ever and the first time a rent rise has broken the 10% barrier.
Rent prices are now 15% more than they were before the Covid-19 lockdown.
Rent prices are being fuelled by strong tenant demand
Rightmove says that the rocketing rent prices are being fuelled by strong tenant demand, which has risen by 6% over the past year.
However, there has also been a significant drop in the number of rental properties becoming available - numbers fell by 50%.
For tenants in London, there has been a 47% drop in housing stock, while tenant demand has jumped by 81%.
Rightmove points to the ongoing mismatch between the properties that are available to rent and tenant demand with renters facing an increasingly competitive rental sector.
Tenants struggling to find reasonably priced properties to rent
And with tenants struggling to find reasonably priced properties to rent, they are being forced to consider areas they would not otherwise do.
Rightmove points to Liverpool where the average rent is £876 per month, but in nearby Prenton tenants can find homes to rent at £591, and in Birkenhead the average rent is £551.
The firm’s director of property data, Tim Bannister, said: “There are several factors that affect demand and supply.
“On the supply side, we hear from landlords and agents that tenants are signing a longer lease which has prevented stock that would normally come onto the market from doing so.
“When it comes to demand, we are seeing the effects of the pandemic still, with tenants balancing what they need from their home, how close they will need to live for work and where they can afford.”
Average rent outside of London
The average rent outside of London is now £1,088 per month, last year, the average price was £982.
However, for tenants in the capital, there’s a new record rent of £2,193 per calendar month being recorded.
Just a year ago, the average London rent was £1,919, that’s a 14.3% rise over 12 months. It’s also the biggest annual rise that Rightmove has recorded for any region.
Rightmove also highlights that a year ago, the number of available properties rose by 19% in London when compared to 2019 - that’s when the capital fell out of favour with tenants temporarily.
UK’s top five rental hotspots
The data also highlights where the UK’s top five rental hotspots are - they are in Swansea, Manchester, Margate, Liverpool and Ascot.
Rightmove also says that rental yields are increasing in 2022, and for buy to let landlords, the best regions for rental yield are Scotland with 6.7%, the North East with 6.2% and the North West with 5.9%.
Simon Thompson, the managing director of Accommodation for Students, said: “The fact that rents are rising quickly with growing tenant demand and a fall in the number of homes to rent should not come as a surprise to the sector.
“Landlords also need to appreciate that the cost of living crisis will affect lots of tenants and landlords need to be prepared for tenants who might struggle to pay rent.”
He added: “The most important issue for landlords is to supply a quality home that is safe and comfortable for tenants because they will be rewarded with someone who wants to enjoy living in their home for longer and will take greater care of it as a result.”
‘Significant’ student accommodation rent rises predicted
Meanwhile, research has revealed that international students around Europe have faced rent rises of 14.5% over the past year.
Along with a prediction of significant rent rises to come, the HousingAnywhere International Rent Index highlights that the most expensive city for students to rent in is Paris where they could be spending €1,978 per month on average to rent a student property.
In second place is London with an average student rent of €1,940.
Demand from international students for rental homes
The index also highlights the demand from international students for rental homes is rising quickly since travel restrictions were lifted which is leading to a strained rental sector.
Also, many international students are finding that the most affordable option is to rent a room in a shared house or apartment, rather than renting a private one-bedroom apartment.
However, the index also highlights two European cities where rent prices fell, they are in Helsinki where prices dropped by 5.9%, and in Brussels where landlords saw a 1.1% drop in rent.
A spokesman for the index said that with cities struggling to develop and then implement a strategy for combating the supply and demand of homes for rent, highlights that many ‘international students have to live in poor living conditions that are generally poorly insulated and overcrowded’.
