Annual rent rise is the highest ever recorded – ONS

The cost of renting in the UK has hit a new high as average rents across the UK rose by 9% in the 12 months to February – the highest rise recorded by the Office for National Statistics (ONS).

The trend of rising rents is consistent across the UK, with all nations experiencing significant growth.

England saw average monthly rents climb to £1,276 (an 8.8% increase), followed closely by Wales at £723 (9.0%) and Scotland at £944 (a sharp rise of 10.9%).

Northern Ireland also reported a substantial rent increase of 9.3% in the year to December 2023.

The most expensive place to rent

London continues to be the most expensive place to rent, with average rents reaching £1,276 a rise of 10.6% in the last year.

The North East remains the most affordable region, with rents averaging £842 and a more moderate increase of 5.7%.

While rents are on the rise, house prices in the year to December fell by 2.2% – though the annual fall recorded in January was 0.6%.

UK private rent increased by 9%

The ONS said: “Average UK private rent increased by 9% in the 12 months to February 2024.

“This was up from 8.5% in the 12 months to January 2024, and represents the highest annual percentage change since this UK data series began in January 2015.

“Average UK house prices decreased 0.6% in the 12 months to January 2024, to £282,000. This was up from a decrease of 2.2% in the 12 months to December 2023.”

The ONS adds that in the 12 months to January 2024, average house prices fell by 1.5% in England to £299,000 and to £213,000 in Wales – a 0.8% drop.

House prices in Scotland to £190,000, a 4.8% rise, and in Northern Ireland average house prices increased by 1.4% to £178,000.

‘These figures are shocking’

Ben Twomey, the chief executive of Generation Rent, said: “These figures are shocking but not surprising – we’ve been feeling the impact of sky-high rents and unaffordable rent increases since 2021 and we have reached the very end of what we can afford.

“As the cost-of-living crisis apparently eases, the cost of renting crisis is continuing at pace.

“Renters are being squeezed to their absolute limit and something has got to give. 9% increases in a year across all tenancies is well above the rate our wages are rising, illustrating how badly renters are protected.”

He added: “This is not just down to landlords’ costs going up – more than half of privately rented homes have no mortgage attached to them – so clearly landlords are raising the rent just because their tenants have no choice but to pay these prices.

“The government needs to listen to renters and take decisive action to slam the brakes on soaring rents in the worst-hit areas.

“Outlawing unaffordable rent rises would give renters much-needed breathing space while the government must get to work building many more affordable and social homes to address the shortage that has caused this.”

‘They are comparing apples and oranges’

Fred Jones, the chief operating officer at Upstix, said: “On Monday, Rightmove said that house prices were higher than a year ago, and today, official statistics say the opposite. Why? Because they are comparing apples and oranges.

“Rightmove’s data records asking prices, which reflect a level of optimism many would consider unwarranted.

“The ONS measures official sale prices. While the market has avoided the crash that many had predicted when interest rates began to rise, it remains constrained, with sale times the longest for four years.”

He added: “This disconnect has a clear implication: sellers must be realistic about pricing if they want their transactions to complete.”

‘Very early glimpse of the January joy’

Sarah Coles, the head of personal finance at Hargreaves Lansdown, said: “This is a very early glimpse of the January joy, which suffused the property market at the start of 2024, and encouraged a decent chunk of buyers and sellers to rejoin the property party.

“These figures actually reflect sales in the autumn, when mortgage rates were higher – but on their way down – and they have already had a positive impact.”

She adds: “The lag in property figures means we’re looking at sales agreed since about October.

“At the start of this period, according to Moneyfacts, the average two-year fixed rate mortgage had fallen back from a high point of 6.85% in August, to 6.47%.

“It then continued to fall throughout the rest of 2023, and hit 5.62% in January. It means the figures emerging in the coming months should look even more positive.”