Poor areas drive PRS growth – with record rent paid in 2022

Poor areas drive PRS growth – with record rent paid in 2022

10:47 AM, 16th January 2023, About A year ago

Text Size

An analysis of the latest census data shows that between 2011 and 2021 the number of households renting privately increased by 151,800 in the 10% most deprived areas of England and Wales, compared to an 80,100 rise in the 10% least deprived areas.

The findings from Hamptons reveal that 23% of households in the poorest 10% of the country rent privately, up from 18% a decade ago – and well above the 13% that rent in the most affluent areas.

The firm’s rental data shows that the total amount of rent paid by the 10% of most deprived areas has more than doubled in a decade, rising 102% from £2.7bn in 2012 to £5.4bn in 2022.

Across the whole of England and Wales, tenants spent a total of £71.5bn on rent in 2022 – a record figure.

And 54% of the decade’s growth came from rising rents, while 46% came from the increase in privately rented households.

‘Growth in the private rented sector ‘

Aneisha Beveridge, the head of research at Hamptons, said: “Growth in the private rented sector over the last decade has come on the back of fewer younger people buying their own home, particularly in the less affluent areas.

“2022 has been a record-breaking year for rental growth but, even so, rents have failed to keep pace with wider inflation, and indeed landlords’ rising costs.

“With the cost-of-living crisis hitting tenants particularly hard, rental growth seems to have settled at a new pace, hovering around the 7% mark for the fifth consecutive month.”

She added: “While we may see the rate of growth soften a little more in the coming months, rents are still likely to rise around 5% in 2023 given the lack of homes available to rent and inflationary pressures on landlords.”

The average rent on a newly let home in Great Britain

Hamptons also says that the average rent on a newly let home in Great Britain ended the year at £1,216 in December, 7.7% up on December 2021.

This means that the average tenant moving home will now be paying an extra £1,044 in rent each year.

The good news for tenants is that rental growth has cooled from its summer peak of 11.5% in May 2022, however, it still marked the strongest annual growth recorded in any December since 2013.

Hamptons also says that a lack of supply continues to fuel rents and while stock levels have picked up from rock-bottom this time last year, there were still 41% fewer homes available to rent across Great Britain than in December 2019.

This, coupled with a 6% increase in the number of tenants looking for a new home, has pushed rents up across the country.

Scotland saw the biggest increase in rents of any region

And, for the second consecutive month, Scotland saw the biggest increase in rents of any region in Great Britain, with annual growth of 11.0% on newly let properties.

Rental increases on existing tenancies in Scotland have been effectively banned since September, which means that landlords are increasingly relying on the open market to raise rents.

Scotland also saw the biggest decline in the number of homes available to rent.

There were 53% fewer homes available to rent in December 2022 than in December 2019 – but there were 38% more would-be tenants looking for somewhere to rent.

Share This Article

Leave Comments

In order to post comments you will need to Sign In or Sign Up for a FREE Membership


Don't have an account? Sign Up

Landlord Tax Planning Book Now