0:01 AM, 18th September 2023, About 2 weeks ago 15
The average rent in Great Britain has now passed £1,300 for the first time in a decade, according to new data.
Hamptons say renters face having to fork out more than £1,000 in some areas in England whilst renters in Inner London see rents soar past £3,000.
Rents in London have been rising at a double-digit pace in 16 of the last 18 months, costing the average tenant an extra £5,508 each year compared to March last year.
Aneisha Beveridge, head of research at Hamptons, said landlords are not entering the market due to high mortgage costs.
“Each passing month has ushered in a new rental market record. Rents have risen more in the last 12 months than they did between 2015 and 2019.
“While the current pace of rental growth is unsustainable long term, many mortgaged landlords are being squeezed just as tightly as tenants.
“Higher rents are only going some way towards helping mortgaged landlords’ balance their books, rather than boosting their profit. This is one of the reasons we haven’t seen large numbers of new landlord’s come into the market.”
Rents on newly let properties rose by a record-breaking 13.4% in Scotland in August, the largest increase in more than a decade.
For the first time last month, rents in Scotland were higher than in the Midlands despite the Scottish government introducing rent controls.
Monthly rents in Scotland reached a staggering £935 compared to an average of £922 across the East Midlands.
There are signs, that some of the upward pressure on rental growth may ease. The number of rental homes on the market carried on rising during August, up 30% on last year’s record low, a sign that homes are sitting on the market slightly longer than last year.
However, the number of rental homes available remains 39% below 2019 levels despite a similar number of tenants looking to move.
Ms Beveridge says high mortgage rates continue to affect the market.
“The fallout from higher mortgage rates continues to buffer the rental market. Higher interest rates have encouraged some leveraged landlords to conserve cash and invest beyond bricks and mortar.
“With the Bank of England raising rates to encourage debt repayment instead of additional borrowing, the 30,000+ fall in the number of outstanding UK buy-to-let mortgages since November shows landlords are playing ball.
“However, it’s a mixed blessing for tenants. With most mortgages repaid by the sale of the home, renters are being short-changed and this is adding fuel to the rental market.”