Average Monthly Rents In UK Hit Record High
by Sumona Real Estate 02 December 2022
A combination of factors has led to a spike in rental prices in the UK, with rents up 11% in a year and a 20% increase in demand in comparison to the same period in 2021.
Finbri, a property bridging finance broker, comments,” Rents are rising as a result of rising demand and a shortage of available rental properties. Currently, the average rent in the UK is £1,162, up 3.2% since July 2022. Whereas, London’s rents, already the highest in the UK, have increased by 16.1% to £2,343 over the last year.
“There just aren’t enough rental properties available to meet the current demand. The property market entry of first-time purchasers who cannot obtain a mortgage is being postponed, and as a result of the rising cost of living, consumers are turning to smaller, more energy-efficient homes. ”
Why Have Rental Prices Increased?
The rise in rental prices has been attributed to the rising demand for rental properties, the increasing cost of living, and a decrease in available rental stock.
Property owners can take advantage of this increased demand by ensuring their listings are competitively priced, while renters should explore all possible options when seeking out a property.
Furthermore, it is important that everyone research the local housing market to ensure they are getting the best deal available.
The UK government is implementing initiatives to help address this issue by making more affordable housing stock available and introducing rent increase caps in certain areas of the country.
These measures are aimed at tackling the issue of rising rents and ensuring that everyone can find a suitable home at an affordable price.
But with rising rates and approximately 40% of landlords having a mortgage on their rental properties, combined with tax changes, is leading to many landlords actively looking to get out of the rental market. With fewer rental properties available, rents will continue to rise.
In what locations have rents increased the most?
There are several locations in which rents have seen a considerable increase, the following are the areas where rents have increased the most:
- Newbury. Situated in the South East, Newbury has seen the greatest annual increase in rental prices of 22.2%, from £1,003 in 2021 to £1,226 in 2022.
- Manchester. Manchester has seen a 20.5% annual increase in rental prices, from £959 to £1,157.
- Cardiff. Cardiff has seen a 19.6% annual increase in rental prices, from £870 to £1,041.
- Sale. Sale is the second location in the North West after Manchester that has seen a spike in rental prices in the last year, an 18.8% annual increase, from £873 to £1,037.
- Wilmslow. Wilmslow is the third location in the North West that has seen a spike in rental prices in the last year, an 18.3% annual increase, from £965 in 2021 to £1,142 in 2022.
- Edinburgh. Edinburgh has seen an 18% annual increase in rental prices, from £1,002 in 2021 to £1,182 in 2022.
Rent prices in the UK have hit record highs this year, with rises in some areas surpassing 20%.
Property investors could take advantage of this increased demand, 50.45% of investors plan to invest further in 2023. Renters should explore all options to secure a suitable home at an affordable price. The UK government is also taking steps to address the issue and ensure that everyone can find an appropriate level of housing at an affordable cost.
How Are Tenants Securing Rental Properties?
Renters are competing fiercely for available homes, and many landlords are seeing a considerable increase in the number of requests for viewings. Around 40% of those renting outside of the capital and 47% of people renting in London are paying more than the room’s advertised price.
Renters must think outside the box to outcompete other tenants, especially in cities like London.
In addition to ensuring they have all the necessary documents and deposit ready whilst also being available as soon as a rental property hits the market, renters have attempted to remain competitive in securing a property by offering 6 months’ rent upfront and offering to pay over the asking price.
Matt Hutchinson, SpareRoom director, comments,
We’ve been running flatshare sites for over 20 years and we’ve never seen the market like this. The spike in demand will ease over time, but the real worry is the continued drop in supply. Landlords are leaving the market in alarming numbers and renters are facing an incredibly tough time. The government has decided growth and jobs are its focus. But jobs are no use if people can’t move to take them.
The UK rental market is experiencing an unprecedented amount of growth with rising rents and increased competition for properties.
Around 50% of property investors are looking to take advantage of this surge in demand while tenants must be prepared to compete to secure a property that meets their needs.
It is important for everyone involved in the rental market to remain informed on current trends and think outside the box to remain competitive.