Rents Rising at Fastest Pace since 2008, Data Suggests
Average monthly rents are rising faster than at any point in the past 13 years, the latest figures from Zoopla indicate; according to the property website, the average cost of renting a home privately was 4.6% higher in September year-on-year, coming out at £968 per month.
Annual rent growth was particularly strong outside London, averaging 6% compared to the same time last year. This is the fastest growth recorded for this part of the sector in more than 14 years.
Skyrocketing monthly rents continue to be fuelled by a lack of affordable inventory and high-demand for quality homes in desirable parts of the country.
The Southwest saw the biggest gains of all, with average monthly rents increasing 9% over the past 12 months. Wales recorded its strongest performance in years with 7.7% annual growth, followed by the East Midlands with just under 7%.
Gradual easing of lockdown restrictions has seen more activity in major cities and busy urban centres, as many workers return to the office and life slowly edges back to normality.
The figures from Zoopla indicate annual rent growth in London of just 1.6%, but this is still strong performance considering average rents were down around 10% at the beginning of the year.
Some of the top-performing cities in terms of annual rent growth were Nottingham and Bristol, both of which recorded growth of more than 8% since September 2020.
Search for Space Fuels Ferocious Competition
Speaking on behalf of Zoopla, head of research Grainne Gilmore said that there was still heavy demand for spacious properties in quieter and less densely populated corners of the country.
“Households looking for the flexibility of rental accommodation, especially students and city workers are back in the market after consecutive lockdowns affected demand levels in major cities,” commented Gilmore.
“Meanwhile, just as in the sales market, there is still a cohort of renters looking for properties offering more space, or a more rural or coastal location.”
Some parts of the country have seen the kinds of average monthly rent hikes that are pricing locals completely out of their own communities. In Purbeck and In Dorset for example, average monthly rents for September had increased by more than 16% since the same time last year.
Combined with high unemployment and lingering economic uncertainty, rising rents are creating a gloomy outlook for millions of private renters.
Dan Wilson Craw, Deputy Director of campaign group Generation Rent, said the whole thing amounted to “terrible news” for current and prospective private renters.
“We have been hearing from renters who have lost bidding wars for homes, or failed affordability checks, so are being priced out of their areas,” he said.
“The chancellor has frozen rates for another year, so these rises will make it even harder to find an affordable home. The government has to do much more to bring rents down – that means building more homes, including social housing.”