Rents rising at 2% but affordability has improvedMake Text Bigger
The inaugural Zoopla Rental Market Report, which records trends in the private rented sector has now been released and it indicates that being a renter is becoming more affordable with rents rising at half of the level of earnings growth during the past year
UK rents have increased by 2% in the year to the end of September to and average of £876. However, with nearly double the rate wage inflation during the same period rental cost are becoming more affordable. The average tenant now spends 31.8% of their earnings on rent compared to a peak of 33.3% in 2016
Zoopla director of research and insights, Richard Donnell, said: “Renting is more affordable today than the 10-year average. This follows weak rental growth over the last three years, and an acceleration in the growth of average earnings.First time buyers, 80% of whom exit the private renting sector to buy, has also moderated rental demand.”
“Rental affordability varies widely across the country, reflecting the relative strength of local economies. High house prices increase the underlying demand for rented homes. Meanwhile, in markets where buying is more affordable, rental demand is limited, resulting in lower rental values.
“Whilst 46% of an average single person’s earnings will go on rent in London, the majority do not rent on their own, which improves the affordability profile. Two people renting a two-bed property in London will spend 24% of their earnings on rent, which increases to 28% for two people renting a three bed home.”
Conversly the report also found that the supply of rental homes has begun tightening since tax changes were introduced in 2016, with landlords buying fewer homes and some selling parts of their portfolios.
Landlord voids have fallen from last year from an average time of 19 days to rent a property from first listing to now just 17 with the typical tenant spending nearly four years in the same property.
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