Rent rises set a record in 2023 amid landlord costs and housing shortage

Rent rises set a record in 2023 amid landlord costs and housing shortage

9:40 AM, 17th January 2024, About 5 months ago 3

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Renters in the UK paid an extra £1,488 per year on average in 2023 as rent prices soared by a record high of 10.2% year-on-year in December, according to a new report.

The research from Hamptons, found that rent prices broke 2022’s record of 7.7%.

Last year, renters in newly let homes paid on average £124 a month more in rent – and outpaced inflation by 3.5% between March and November.

The property firm says the rise in rents is down to higher landlord costs and a shortage of homes available to rent, which are unlikely to ease significantly soon.

‘Pressures on the rental market’

The head of research at Hamptons, Aneisha Beveridge, said: “Pressures on the rental market show few signs of abating.

“Rental growth has been more persistent than wider inflation, predominantly due to the scale of the costs faced by most landlords as a result of higher interest rates.”

She added: “Slightly lower mortgage rates in 2024 should alleviate some of these pressures and take some of the heat out of the rental market, but tenants will probably continue facing bigger rent increases than they did pre-Covid.”

East of England tenants faced the biggest rent rises

Tenants in the East of England faced the steepest rent increases, paying £153 more per month in December 2023 than a year earlier, a 13.3% hike.

Rents in Greater London, the Midlands and the North of England also rose by more than 10% last year.

The report predicted that rents would continue to rise faster than the pre-Covid average of 2.6% over the next few years, although at a slower pace than in 2023.

Rents on newly let properties will increase

Hamptons is forecasting that rents on newly let properties will increase by 7% this year, by 5% in 2025 and 5% in 2026.

The report also suggested that lower mortgage rates might ease some of the pressure on rents, as some landlords will face lower remortgaging costs and some renters will be able to buy their own homes.

However, Hamptons is also warning that this effect might be limited by the high demand for housing and the low supply of new homes.


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Comments

Cider Drinker

9:49 AM, 17th January 2024, About 5 months ago

Rent rises should be considered over a 5 year term (to coincide with the political calendar).

For my properties, the Local Housing Allowance (LHA) will rise in April 2024 and will be just 11% higher than the previous rates (that were based on rents in September 2019).

Michael Booth

19:54 PM, 17th January 2024, About 5 months ago

I have kept my rents well below lha for the best part of 24 year costing me thousands £, due to selective licencing, insurance hike , council and goverment legislation they will increase dramatically unfortunately for the tenants, can't say l haven't tried to do my bit for society but l am not a charity.

Jo Westlake

8:45 AM, 18th January 2024, About 5 months ago

In another article today it says "The Office for National Statistics says private rents in England experienced a 6.1 per cent rise in 2023".
Which is correct - a letting agent or the ONS? Is one talking about newly let properties only and the other all rental properties?

In April the LHA will be increasing by 10% on a one bed, 18% on 2 and 4 beds and 15% on 3 beds. It still won't be anywhere close to the cheapest available properties on Rightmove. For most available properties in my area these figures are about 85% of the cost of the cheapest advertised properties of each size. What happened to LHA being set at the 30th percentile?

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