Rent rises in Scotland and London outstrip inflation

Rent rises in Scotland and London outstrip inflation

10:08 AM, 26th January 2023, About A year ago 1

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Rents continued to rise in the last quarter of 2022 with tenants in London and Scotland seeing their increases outstripping inflation, The Deposit Protection Service (The DPS) says.

The country’s largest protector of deposits reveals that average rents reached £903 in the last quarter – an increase of 1.57% (£14) since the previous quarter.

However, rents have risen by 8.27%, or £69, since the last quarter of 2021.

Rent rises outstrip the Consumer Prices Index

The figures also show that tenants in London and Scotland have seen their rent rises outstrip the Consumer Prices Index annual rate of inflation figure of 9.20%.

Renters in the capital saw rents rise 11.59% or £160 from £1,381 to £1,541 between Q4 2021 and Q4 2022.

In Scotland, rents increased by 12.02% or £79 from £657 to £736 during the same period.

The DPS says that the average annual UK rent is now £1,332 higher than the same time two years ago – that’s a rate of increase of £111 or 14.02% a month.

‘Sustained rent rises are a result of a complex combination’

Matt Trevett, the managing director at The DPS, said: “The UK’s sustained rent rises are a result of a complex combination of inflationary pressures due to demand for housing.

“Higher interest rates may also be preventing those tenants who are looking to buy their own property from meeting mortgage affordability criteria, which means they must continue to stay in the private rental sector.

“Higher building material costs may also be affecting the pace and price of the construction of new homes, which is also squeezing the supply of properties for rent or purchase.”

‘Landlords must now meet stricter affordability tests’

Paul Fryers, the managing director at Zephyr Homeloans, said: “Whilst mortgage interest rates for buy-to-let properties have stabilised during the past few months, landlords must now meet stricter affordability tests.

“As a result, landlords are under pressure to increase rents to ensure they have sufficient funds.”

He added: “Landlords who want to exercise forbearance for their tenants during the present time may find themselves prioritising their mortgage-related obligations.”

Yorkshire saw the slowest annual growth

In the regions, The DPS says that rents in Yorkshire saw the slowest annual growth between Q4 2021 and Q4 2022, up £32 (5.50%) from £582 to £614.

The organisation adds that rents in the South East increased by £53 (5.52%) from £961 to £1,014.

But rents in these regions still grew faster than the national average 5.30% annual rent rise during 2021.

 

Region Average Q4 2022 Rent Change since Q3 2022 Change since Q4 2021
£ % £ %
London £1,541 £1,499 2.80% £160 11.59%
South East £1,014 £1,023 -0.88% £53 5.52%
South West £894 £882 1.36% £60 7.19%
East £945 £937 0.85% £62 7.02%
East Midlands £685 £679 0.88% £45 7.03%
West Midlands £743 £705 5.39% £58 8.47%
Yorkshire £614 £604 1.66% £32 5.50%
North West £703 £692 1.59% £58 8.99%
North East £607 £585 3.76% £53 9.57%
Scotland £736 £721 2.08% £79 12.02%
Wales £679 £669 1.49% £38 5.93%
Northern Ireland £612 £606 0.99% £41 7.18%

 


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Comments

Beaver

17:55 PM, 26th January 2023, About A year ago

So my best guess is that the 12.02% rise in Scotland is a consequence of the SNP's last rent freeze which you would anticipate would have the effect of kicking the can down the road.

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