Record rents stretch tenant budgets

Landlords are seeing record rents agreed, but tenants are now spending an average of 32% of their income on housing.

HomeLet’s August index puts the average UK monthly rent at £1,382, up 0.9% from July.

A year ago, the figure was £1,328, with the latest increase taking annual growth to 4.1%.

In London, rent now accounts for 39.8% of tenants’ income.

Tenant affordability concerns

Julie Ford, founder of Lettings Advice Service, said: “While it is too early to draw definitive conclusions, it is possible that another consecutive rent increase reflects the impact of the Renters’ Rights Act on landlord behaviour and market dynamics.”

She added: “With renters already allocating 32% of their income to housing costs, the sector must consider whether continued rent growth is sustainable in an environment where wages are not rising at the same pace and the cost of living continues to squeeze household budgets.”

London rents climb

HomeLet’s data also shows that the average monthly rent in London reached £2,238 last month.

That followed a 1.4% rise since July, taking the annual increase to 5.1%.

Outside the capital, tenants paid an average of £1,179, compared with £1,170 the previous month.

Rents outside London were 3.4% higher than a year earlier.

Regional rent changes

The South West recorded the strongest annual growth, with rents rising 5.2% to £1,264 a month.

Northern Ireland had the largest monthly increase at 2.4%, bringing its average to £987.

Wales recorded a fall, with rents dropping to £925, down 1% both monthly and annually.