The average property rental prices in the United Kingdom have been accelerating at a phenomenal rate over recent years. Now, the results of a new study, published by property website Zoopla, reveal the areas of the UK most affected by skyrocketing home rental prices.
The Zoopla report reveals that the biggest increases in average property rental prices of the past year occurred in Bristol, Leeds, and Nottingham. Meanwhile, the biggest annual reduction in property rental prices was noted in Aberdeen.
Specifically, Zoopla reported that tenants in Nottingham signing new tenancy agreements this year are paying around 5.4% more than they would have in 2018. Both Bristol and Leeds recorded a 4.5% annual increase in inflation that significantly outpaced average UK wage growth for the same time period.
Despite the significant rental property price hikes of recent years, Zoopla stated that it is actually becoming more affordable for tenants to rent homes in the UK. This is partially attributed to more first-time buyers getting on the property ladder, taking at least a little pressure off the property letting market.
In Aberdeen, the average property rental price decrease of 4.1% was attributed to wider economic issues affecting the area. Aberdeen’s economy is closely tied to the oil industry, which has a knock-on effect on both average house prices and monthly rent prices.
Zoopla’s report also showed that property rentals are becoming cheaper in Middlesbrough and Coventry.
London leads with the highest rental costs.
The most recent Family Resources Survey carried out by the government found that around half of 25- to 34-year-olds and three-quarters of 16- to 24-year-olds now live in privately owned rental properties in the UK. The vast majority of rental properties in the United Kingdom are located in London, which is also where average rent prices are the highest by a significant margin.
According to the report from Zoopla, most private tenants in the United Kingdom use approximately a third of their earnings to cover their rent. Private tenants in London, Oxford, Brighton, and Cambridge spend a considerably higher proportion of their earnings on rent, whereas tenants in Stoke, Bradford, and Hull rank at the opposite end of the scale.
Average property rental prices in the UK are up approximately 2% year-on-year, though this is well below the average annual wage increases for UK workers.
UK-wide rental prices are up by an average of 2% in the last year, which is about half the typical level of wage rises.
“Renting is more affordable today than the 10-year average. An increase in first-time buyers, 80% of whom exit the private renting sector to buy, has also moderated rental demand,” reported Zoopla, commenting on the findings of the study.
“Rental affordability varies widely across the country, reflecting the relative strength of local economies.