Tenants face soaring rents as demand outstrips supply

Renting a home in the UK has become more expensive than ever, as a new report reveals that the average rent for a new tenancy has risen by 10.3% in the past year.

According to Zoopla, renters now pay £1,164 per month on average, which is £1,320 more per year than in September 2022.

The report attributes the high rental inflation to a supply-demand imbalance, which has been exacerbated by the peak in demand for rental properties this summer.

The property platform is also predicting that rent growth will remain above 9% for the rest of the year, as high mortgage rates deter many renters from buying their own homes.

It also expects national rents to grow by 5% to 6% in 2024, with urban areas seeing higher increases.

‘Cities in which renters pay more than £1,000 per month’

Zoopla’s senior property researcher, Izabella Lubowiecka, said: “The number of cities in which renters pay more than £1,000 per month on average when they start a new tenancy is growing.

“In 2023, new additions to this group were Southampton and York, where it now costs £1,057 and £1,045 per month to rent a home.

“The latest place to join the club is Cardiff, where average rents increased by 11.2% over last year to reach £1,012.”

She added: “High rents in London make renting expensive, pushing demand into more affordable areas.

“This boost in demand in commuter areas in the South East has led to an increase in the number of commutable towns with average rents exceeding £1,000.”

Landlords are charging more for new tenancies

The research shows that the Office for National Statistics (ONS) says rents for tenants remaining in their existing homes is much lower at 5.5% – which suggests that landlords are charging more for new tenancies to offset their rising costs and regulatory changes, Zoopla says.

Scotland has the highest rental inflation in the UK at 12.8%, followed by Northern Ireland at 9.7% and England at 9.6%.

Wales has the lowest increase at 7.4%.

Zoopla also notes that Scottish landlords are adjusting their rents to account for the fact that they can only raise them once a year during a tenancy.

The average rent in Scotland is now £750 per month, which is £90 more than a year ago.

High rents and the low supply of homes

The platform is also warning that high rents and the low supply of homes are forcing renters to make compromises on their living standards.

It says that renters are increasingly opting for smaller homes, cheaper areas or shared properties to reduce their costs.

However, this comes at the expense of privacy and space, as data from the Resolution Foundation shows that private renters have lost 16% of floor space per person over the last 20 years.

The report concludes that the UK rental market needs more investment and innovation to meet the growing demand and improve the quality of homes for renters.

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