0:02 AM, 9th December 2022, About 2 months ago 2
Single tenants are finding it harder to afford their rent with rocketing prices, one property platform reveals.
In its latest rental market report, Zoopla says that rental unaffordability for single earners has reached its highest level for more than a decade.
The report points to the average rent for a new letting growing by £117 per month since last year and it is now £1,078 per month.
For a single earner renting on their own, that accounts for 35% of the average single tenant’s income.
And that ratio is at its highest for more than 10 years with a lack of rental supply and strong demand making the situation worse.
However, enquiries about homes to rent per estate agent’s branch are 46% above the five-year average with tenants having to rent longer because of rising mortgage rates affecting their chances to buy.
Zoopla also says that the gap in rental inflation between new lettings and all privately rented homes is also widening.
They say that for the 75% of tenants who do not move each year, their rent rises tend to be much lower at 3.8% in the year to October 2022.
This gap is why a growing number of renters are renewing their tenancies and staying put to avoid rent hikes if they move.
There is more bad news for single earners because Zoopla has calculated that in 2023, if rent price rises continue at the current rate of 12% – the proportion of earnings needed to pay rent would be stretched even higher to 37%.
This is unlikely, however, since the growing unaffordability of renting means that tenants won’t be able to afford the higher rates and inflation looks set to slow to 5% next year
The report also looks at where rents are growing quickest, and Zoopla says rents have risen by 17% or £273 per month in London over the past 12 months.
In Manchester rents grew by 15.6%, Birmingham 12.3%, Glasgow 14.1%, Bristol 12.9% and Sheffield 12.4%.
Richard Donnell, an executive director at Zoopla, said: “Renters are paying the price for low levels of new investment in private rented housing over the last six years.
“A chronic lack of supply is behind the rapid growth in rents which are increasingly unaffordable for the nation’s renters, especially single-person households and those on low incomes.”
He added: “Renters are having to adopt a range of strategies to deal with rising rents.
“We have seen a rapid increase in demand for one and two-bed flats while some renters are now considering sharing a property to cover the cost of the rent.
“Only a big increase in investment in the sector will ease the pressure on affordability and boost consumer choice.
“In the short term, we expect the growing unaffordability of renting to reduce rental increases in 2023 to 5%.”
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