The highest rental growth since the Global Financial Crisis, coupled with the cost of living crisis, is putting increased pressure on renters according to Zoopla.
Average UK annual rental growth has reached a 14 year high of 11 per cent with rents increasing to £995 in the first quarter of 2022.
This represents an increase of £88 a month compared to the start of the pandemic and follows a strong bounce back from last year, when average UK rents were down by more than one per cent, despite wage growth peaking at 8.8 per cent last summer.
Zoopla says that for renters, this has led to a significant increase in the proportion of gross income spent on rent, particularly in London where it has risen to a significant 52 per cent for a single earner - a level not seen since March 2020.
This falls to 26 per cent for sharers and means that a new let agreed for an average rental property in London will cost more than £20,000 in rent over the next 12 months - putting significant pressure on renters already dealing with the backdrop of the cost of living crisis.
In the UK as a whole, the average rent now accounts for over a third of gross income for a single earner. Around a third of renters live alone, according to the English Housing Survey.
There’s also been a strong bounce back in rental growth in London from falls of 10 per cent seen last year. Average annual rental growth in the capital rose to 15 per cent at the end of Q1 - driven by demand for flats from students, office workers and international demand.
Demand for rental property continues to outpace supply across the country, pushing up rents, although the rate of rental growth will slow through the second half of the year
The portal’s market snapshot suggests that the rental market remains highly localised, with the most affordable rental markets for dual earners located in more rural areas including Great Yarmouth in the East of England, South Somerset in the South West and North East Lincolnshire in Yorkshire & the Humber.
In these markets, average rents account for up to just 15 per cent of joint gross income.
In London, Bromley is the most affordable rental market, where average rents account for 19 per cent of joint gross income.
In the North West, Copeland, a local authority on the edge of the Lake District, encompassing the towns of Whitehaven and Cleator Moor is the most affordable rental market.
Gráinne Gilmore, head of research at Zoopla, comments: “UK rental growth is being driven by high rental demand and limited supply, trends that are more pronounced in city centres.
“The surge of post-pandemic pent-up rental demand will normalise through Q2 and Q3 however, which means rental growth levels will start to ease.
“Affordability considerations will also start to put a limit on further rental growth although this may occur at different times depending on location.
“Rents are likely to continue rising for longer in areas which have the most constrained stock levels - currently London, Scotland and the South West.”
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The abolition of S21, EPC C, S24, Recent Covid ban on evictions, High house prices, licensing scheme’s….. the list goes on ! Stop RTB right now and look at why landlords are selling up ! Or this will get worse.
Grainne, this is rubbish and exaggerated by a country mile.
What kind of nonsense research is this and you the head, I wouldn’t have expected Zoopla not to be so anti-LL considering all the business they had from LL’s before switching against. How can you have research about the cost of renting without factoring in the huge on going costs of Regulation’s the main driver of high Rents. My Rents haven’t gone up at all but in real terms gone down. Say if I take one of my properties with 5 shares with a salary of £30k = £150k so according to you I should be getting 75k Rent pa instead of £18k pa, (some are getting 20k others 40k). So are my rents too low by a factor of 4 it’s nonsense of Course.
On the other hand if someone wants to have a property all to themselves it may well costs them half their wages.
EVERYONE is under pressure currently, not just renters, most of whom won't have had their rents increased if they're good tenants.
If Shelter cared about mortgage payers they would be claiming interest rates are 10 times what they were a few months ago, but many mortgage rates have doubled in reality where they weren't or couldn't be fixed.in time.
They are trying to milk a dry cow.
We are living in times of high inflation, which effects everything and everyone, costs are being piled on and will be passed on, that's the way it works
Unfortunately if they can’t be passed on or absorbed it called bust.
And there are a lot of people and businesses that will be BUST
Reminds me of the early 70s
I recall from 1973-4 prices effectively doubled .
The most expensive car went from 16k to 32k overnight, god help us all if that happens again …
I worked for British Gas 1963 to 1983, worked for it again a few years ago, it's been looted including gas and oil and oil fields and flogged off, as has the rest of the country.Debenhams and North Sea fish are two good examples. Inflation in the 70s was due to the oil countries screwing the west over Israel. Britain is now a debt junkie, money lenders are having a real killing
I feel sorry( no I don’t ) for the out of touch mamby pamby snowflake hug a tree next generation, they’re in for one hell of a reality check 😂
Taxed into oblivion
Wow George 👀 maybe a career working for the Samaritans is calling 🤔
Edwin, maybe in the mean time they forgot to tell Sid, but if you still got the sharers you are in luck. I work indirectly with Contractor for British Gas back in the day. Cobham, West ,Byfleet, L’pool, Sheffield (only place to have 4 G.W’s), Sleaford and Boston. I seen a brand new Ford Anglina in Showroom in 65/66 for £625.00. Petrol was 4 shillings & 6 pence per Gallon (22.5 p in today’s money or 5p per litre, not £1.95 per litre. So we are getting taxed out of it on inflation.
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