- Average UK rent now accounts for 34.4% of a single earner’s income
- Recent changes in landlord rule have seen owners sell their properties
- Rents in London have increased by 18% in the last 12 months
- Zoopla warns there is room for more rental growth in some areas
The average rent in the UK has risen from Â£115 a month from last year to Â£1051, which is 34.4 per cent of the average income of a single earner.
Rent growth has accelerated over the past 12 months â from 2 percent in July 2021 to 12.3 percent today, according to research by Joopla.
This, coupled with rising energy bills, means that renters are increasingly looking for smaller homes to keep costs down, the property portal said.
Shortage in supply: The current level of available housing stock is almost half the average of the last five years, with no significant increase expected anytime soon.
It said the increase was due to the lack of homes for rent. The supply of rental properties is currently sitting at almost half of the average level for the last five years.
Zoopla said the average UK letting agent had just eight homes available for rent this summer â half the amount was in the summer of 2017 to 2019.
The number of homes advertised for rent is running seven percent below the long-term average, as renters stay to avoid a rise in rents.
At the same time, private landlords continue to sell homes to reduce their portfolios in the face of tax and regulatory changes.
Renters looking for smaller, cheaper homes
These rise in rents, coupled with the cost of living crisis, have led to a decline in renters looking for two and three bed homes, as they are opting for one and two bed flats instead.
Faced with increased energy costs, Zoopla said that renters were looking for smaller properties that are more affordable to maintain.
Rise: The imbalance between the supply and demand of rental properties is forcing rents
Moving up: New renters or those looking to relocate face a higher increase in their monthly housing costs than new renters, putting additional pressure on the market
However, three out of four tenants will decide to stay in their current property, accepting an average of four per cent increase in rents.
Zoopla said those moving into a new property would get their monthly rent on average 12.3 percent higher.
Richard Donnell, executive director of Zoopla, said: ‘Fairs have increased over the past year, but there are signs the pace of growth is peaking and will slow in 2023.
‘Tenants are responding and are looking for smaller, better value for money homes, keeping an eye on energy costs as much as rental levels.
Capital values: Rent growth in London has lagged other regions of the country, but there are signs that price inflation levels are easing
âThe rental market needs new homes for rent to address these challenges.
‘Greater regulation has seen less new investment and a small but growing number of landlord sales, meaning the rental market has stopped growing since 2016.
‘Policy makers need to tread a careful path between protecting consumers and ensuring a good supply of homes for rent.’
Rising rents in cities in contrast to the trend of the epidemic
The data also shows a reversal of the trend seen during the height of the COVID-19 pandemic.
Rent growth in urban markets (10.5 percent) is now outpacing rural markets (8.5 percent) as strong job growth drives demand in cities.
Fares are rising rapidly in all parts of the UK, but there are regional differences.
Fares in the North East have seen a rise of only 7.6 per cent, but London has increased by about 18 per cent. While the annual growth rate has accelerated over the past year, it is tending to plateau.
Katinka Hill, regional lettings rector at estate agent Chesterton, says: ‘London has long established itself as a hotspot for professionals, who have always sought rentals for one- and two-bedroom flats or pieds–terre. Driven demand.
‘As tenants now face additional pressure from the cost of living crisis, we are seeing an increase in inquiries for small apartments which is creating an even more competitive market for renters.’
Zoopla says their data shows more headroom for above-average rental growth in areas that currently have some of the lowest rents in the country.
Further, the company has warned that there is little chance of a significant improvement in rental supply in the near term as private landlords continue to sell properties.
The Best Mortgage Rates and How to Find Them
Mortgage rates have risen significantly as the Bank of England base rate climbed sharply.
If you are looking to buy, move or mortgage your first home, or have a homeowner to buy, it is important to get good independent mortgage advice from a broker who can help you find the best deal.
To help our readers find the best mortgage, This Is Money has partnered with independent fee-free broker L&C.
Our mortgage calculator Powered by L&C lets you filter deals to see which best suit your home value and deposit level.
You can compare different mortgage fixed rate lengths with monthly and total costs, ranging from two-year fixes to five-year fixes and ten-year fixes.
Use the tools at the links below to compare the best deals, taking into account both fees and rates. You can also start an online application in your own time and save it as it progresses.
Credit: www.dailymail.co.uk /