Rents are rising at their fastest rate since the financial crisis 14 years ago as high demand and lack of supply further add to the cost-of-living pinch.
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According to property portal Zoopla, the average rent across the UK now stands at £995 per month – or £830 excluding London. Data from rival site Rightmove has found monthly rental payments are 40% higher than ten years ago, having risen at the fastest rate on record in the last 12 months.
It means even more of a renter’s income is being spent on their housing as a result, with Zoopla estimating the typical single-income household in London is spending 52% of its monthly incomings on rent.
The main driver behind the steep increase in rents is the high demand for properties but not enough supply, a trend that is “more pronounced” in city centres, said Gráinne Gilmore, Zoopla’s head of research.
“Rents are likely to continue rising for longer in areas which have the most constrained stock levels – currently London, Scotland and the South West,” she added.
This marks a dramatic upturn in the rental market in the capital. Changing working practices and an exodus of people from London during the pandemic saw rental growth fall 10% last year. However, as students, office workers and international demand has returned to the capital with the decline in Covid-19 measures, average annual growth rose to 15% in the first three months of 2022.
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The Economics Observatory says this conforms to a pattern in which “the London housing market tends to have larger peaks and troughs in rental prices compared with the rest of the UK”.
But while London renters are paying the highest prices, “it’s those in the North West that could see the sharpest increase between the current cost of renting and the cost required in 12 months’ time”, said Property Investor Today, citing research by rental platform Ocasa.
While the government has announced reforms to protect tenants’ rights through the Renters’ Reform Bill, “there has been little action on the issues driving rising rents, namely high demand for properties and a lack of supply” reported the Big Issue.
TOP 10 MOST AFFORDABLE AREAS IN THE UK TO RENT (PER MONTH)
1. Stoke-on-Trent – £489
2. Bradford – £537
3. Sunderland – £568
4. Blackpool – £571
5. Doncaster – £575
6. Wigan – £578
7. Derby – £627
8. Dundee – £636
9. Swansea – £657
10. Aberdeen – £661
TOP 10 MOST EXPENSIVE AREAS IN THE UK TO RENT (PER MONTH)
1. London – £2,100
2. Brighton – £1,403
3. Oxford – £1,374
4. Cambridge – £1,326
5. Reading – £1,186
6. Poole – £1,181
7. Bristol – £1,135
8. Edinburgh – 1,053
9. Milton Keynes – £1,041
10. Manchester – £969
