Houses aren’t the only things seeing a rise in prices, as every area of the UK recorded a growth in rent prices during September. Greater London alone saw a 2.5% increase, which helped to drive the average rent in the UK to £1,159 per calendar month. This is a notable 1.4% rise from the previous month.
Data from lettings insurance company, HomeLet, reveals that average rents across the UK (Excluding London) now stand at £971 PCM, a jump from 1% between August and September. Their Rental Index also found that the North-East saw the second largest monthly variance, with rents rising by 2.4% between August to September, boosting the average rent up to £609 PCM.
These figures?are from data on achieved rents for just-agreed tenancies arranged in the most recent period – this provides a detailed insight into the lettings market, its current trends and consumer behaviour across the UK.
Why are rents rising?
UK rental growth has long been driven by mounting rental demand, and increasingly limited supply. This creates a cycle, whereby rising rents mean tenants are staying put, rather than moving to a property where they could end up paying more rent - contributing to the lack of supply which drove rents up in the first place.
Zoopla found that tenants are staying in rental properties for an extra five months in 2022, compared to five years prior.
Rightmove also acknowledged the same phenomenon, and noted that the number of new rental listings peaked for the year in June 2022.
Tim Bannister, Rightmove’s director of property data, said: “A shortage of rental homes and strong demand for the properties available has led to a greater number of tenants choosing to renew their leases and stay put, rather than re-enter a competitive rental market.”
“People who had been waiting to see what happened last year are now being faced with record rents, and so are seeking out properties where they can have more certainty over their outgoings, with all bills included becoming increasingly sought after.”
rrrWill rent prices go down in 2023?
Most experts forecast that rents will continue to rise into 2023, albeit at a slower pace, as the cost-of-living crisis continues to take its toll on household incomes.
But, the localised element of the market means areas where demand is at its highest, could see rents continue to grow.
Rightmove’s Tim Bannister stated that it will take time for the difference between demand and supply to level out to see rents fall.
“The story of the rental market continues to be one of high tenant demand but not enough available homes to meet that demand,” he noted.
“The wide gap that has been created between supply and demand over the last two years will take time to narrow. Until then, this imbalance will continue to support asking rent growth. This has led to our revised forecast of an 8% rise in asking rents by the end of the year up from 5%.”
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