Christmas rental surge forces tenants to earn more to secure a home

The traditional pre-Christmas scramble for rented homes has pushed up the income that tenants typically need to secure a property in several parts of the UK.

Propertymark’s latest rent price and salary tracker suggests the annual changes in required salaries remain relatively small in most areas.

But some regions have seen big increases in the earnings needed to pass affordability checks.

That’s the case for tenants in Wales, the South West, Yorkshire and Humberside, the North East and parts of the Midlands.

In contrast, Scotland, Northern Ireland, London and the East of England saw only slight year-on-year movement in the salary benchmarks used by agents and referencing firms.

Short-term rent increases

Megan Eighteen, the president of ARLA Propertymark, said: “Seasonal pressures are clearly influencing the market as we move into the pre-Christmas period, with many tenants aiming to secure a home before the end of the year.

“This surge in demand is amplifying short-term rent increases in several regions, even though the underlying year-on-year trends remain relatively steady.”

She added: “What we’re seeing is not a fundamental shift in affordability, but a seasonal squeeze layered on top of an already tight rental landscape.

“Unless more homes become available to rent, rent levels will continue to place a significant strain on households looking to move at peak times of the year.”

Where rents rose

The short-term rent pressures have affected tenants in Wales the most with a 15.3% rise in average rents between October and November.

Rents in the South West climbed 20.1%, in Yorkshire and Humberside they rose 18.2% and the North East saw the steepest jump at 39.7%.

Those rent rises were driven by a rush of pre-Christmas renter demand and tight supply.

Salaries rose slightly for tenants to meet rising rents with wages in Scotland up 1.7%, the East of England saw a 1.6% rise, and Yorkshire and Humberside increased 1.9%.

In contrast, Wales fell 4.5% and the East Midlands dipped 2.1%.

London’s required salary dropped slightly at 1.1%.

What tenants need to earn

Propertymark says that despite the dramatic month-on-month swings, the numbers show national averages masking increasingly polarised local conditions.

For example, a renter in the South East now needs an annual salary of £48,180, while in Northern Ireland the figure is £27,720.

London remains the highest at £66,240, reflecting its average November rent of £2,208.

Supply constraints are also keeping the market tight, and agents say the seasonal rush has intensified competition at the very moment when more households want to move.