Average annual UK rental growth has hit a 13-year high, with rents increasing 8.3% year-on-year to £969 per calendar month (pcm) in Q4 2021, up £62 per month since the start of the pandemic.
The data, based on new lets as recorded by Zoopla, shows that the average rent now accounts for 37% of gross income for a single earner – up from a pandemic dip of 34% during most of 2021 but broadly in line with the 10-year average of 36%.
Overall, average rents are up almost 12% over the last five years, fuelled in part by strong demand, which was up 76% in January compared to the New Year market between 2018 and 2021.
In terms of housing supply, the stock of rental properties currently available across the UK is 39% lower than the five-year average around this time of year.
Inner city London has seen a rental growth of 11% compared to the same time last year – but the decline in rents during the pandemic means this has translated into an increase of just £18 per month in rent compared to March 2020.
Gráinne Gilmore, head of research, Zoopla, commented: “Rents have risen sharply in recent months, amid a backdrop of rising living costs. But it is important to point out that in terms of rental affordability, in most markets rents are still close to the 10-year average. As demand continues to outpace supply, there will be further upward pressure on rents, but affordability considerations will act as a brake on large rises.
“In addition, the January peak in rental demand will start to ease in the coming months, putting less severe pressure on supply, which will lead to more local market competition, and more modest rental increases.
“The flooding of rental demand back into city centres thanks to office workers, students and international demand returning to cities means the post-pandemic ‘recalibration’ of the rental market is well underway.”
Comments (1)
This is very much what we are seeing. Normally have 30 to 40 properties available and only got 6 and been this way for 6 months, all agents have very low stock.
Rent for a seaside town, normally £400-450, only 1 property available and its up for £700 (and rented).
Our bread and butter houses have increased £100 which is a 20 to 25% increase, it’s huge increase for small North East towns and I can see more increases to come.
Then again properties have gone up £30,000 to £40,000 from £80,000 before covid up to £120,000 and people are punting them at £145,000 and with so little stock I can see some being bought for these prices – it’s to be seen what the surveyors say, but many people have cash saved to shore up down-vals.