The average private rental prices in Great Britain have reached unprecedented levels, with certain areas experiencing increases of over 25% within a single year, according to recent data.
In regions outside London, the standard private rental price for new listings has soared to a record-breaking £1,385 per month in the third quarter of the year, as reported by the property website Rightmove.
Meanwhile, in London itself, the average rental price has hit a new peak at £2,736 monthly.
Rightmove has noted this quarter as the third consecutive record-breaking period for rental advertisements this year. The situation regarding affordability continues to be extremely tight for prospective renters. Even though average salaries have risen by 5% from the previous year, rental costs now consume 44% of the average income, an increase from 40% five years earlier.
The conditions for landlords are also becoming increasingly difficult. Rightmove has highlighted challenges such as the increase in stamp duty from last autumn, ongoing speculation about further tax changes in the upcoming budget, and the implications of the government’s renters’ rights bill. These factors are causing some buy-to-let landlords to exit the market, while discouraging new investments. The renters’ rights bill has already passed through parliament and is waiting for royal approval.
The surge in rent over recent years can be attributed to several factors: a growing demand that surpasses the supply of rental properties, lifestyle and work changes spurred by the pandemic, and landlords passing on the costs of higher interest rates or choosing to sell their properties.
This month, Citizens Advice revealed that their analysis of official spending statistics and client data shows that private renters, particularly single parents, are among those struggling most with living costs. It’s not uncommon for some individuals to spend over half of their net income on rent.
Rightmove reported that the availability of rental homes has increased by 9% compared to last year, yet this number is still 23% lower than in 2019.
Recent months have seen a slowdown in the rate at which new rental properties are being listed, with only a 1% increase from the previous year.
Despite these general trends, there is considerable regional variation. In some areas, the average amounts paid by new tenants have risen significantly.
The highest increase was observed in Fulwood, a suburb of Preston in Lancashire, where average rental prices jumped by 32% in a year, from £970 to £1,284 per month. Other significant increases were seen in Keighley in West Yorkshire and Frome in Somerset, each with a 27% rise, followed by Newquay in Cornwall at 23%, and Gainsborough in Lincolnshire at 22%.
Additional areas like Burgess Hill in West Sussex, Billericay in Essex, and Paisley in Renfrewshire – recently named Scotland’s town of the year – have all reported growth of at least 17%.
According to Daniel Fisher, head of lettings at the estate agent John D Wood & Co, tenant demand has decreased due to the broader economic and political uncertainties making individuals cautious about moving. Concurrently, many landlords are reluctant to invest under the current conditions.
“The result is a slower, more cautious market that’s likely to remain uneven over the next year or so,” Fisher concluded.
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