UK rents reach the highest level on record – ONS

UK rents reach the highest level on record – ONS

10:04 AM, 17th April 2024, About 2 months ago 4

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Renting costs in the UK continue to grow with average rents jumping by 9.2% in the year to March – the steepest annual rise since data collection began in 2015.

The figures from the Office for National Statistics (ONS) follow previous rent rises, with February’s data showing an annual rise of 9%.

It adds that this trend is putting a strain on renters’ budgets, particularly as the cost of living continues to climb.

The ONS figures for housing costs also show that house prices have dipped by 0.2% nationally over the past year.

Average rent in Great Britain was £1,246

In Great Britain, the average rent was £1,246 in March – which is £104 (9.1%) higher than 12 months ago.

The average private rent for England was £1,285 in March, up 9.1% (£107) – that’s the highest annual rise since 2006.

In Wales, renters are paying an average of £727, up 9% (£60).

The ONS says this annual rise is unchanged from the figure for 12 months to February and remains below Wales’s record-high annual rise of 9.8% in November 2023.

The average private rent for Scotland was £947 in March, up 10.5% (£90) from a year earlier.

This was down from an annual increase of 10.9% in February.

Northern Ireland average rent to January increased by 10.1% – the highest rise 2016.

Rental inflation is driven by supply and demand

Richard Rowntree, the managing director of mortgages at Paragon Bank, said: “The increase in private rental inflation is driven by the supply and demand imbalance seen in many parts of the UK.

“Even though tenant demand has come off the record highs seen last summer, there are still many more tenants than there are properties.

“With expected strong population growth and household formation in the coming years, the stock of rental homes must be increased to keep pace.”

House prices dip by 0.2%

While rents are skyrocketing, the ONS says house prices have seen a modest shift with prices dipping by 0.2% nationally.

In the year to February, England’s average house price fell by 1.1% to £298,000, in Wales it dropped 1.2% to £211,000 and rose by 5.6% in Scotland to £188,000.

In Northern Ireland house prices increased by 1.4% to £178,000 – the latest figures are to December last year.

Positive monthly growth is welcome

The director of Benham and Reeves, Marc von Grundherr, said: “Further positive monthly growth is, of course, very welcome.

“However, it’s important to remember that given the lag in reporting sold prices, today’s figures related to February house prices and a market that has barely shaken off the impact of the Christmas lull in activity.”

He adds: “What we’ve seen since is a consistent increase in mortgage approvals and growth in mortgage approved house prices and so it’s only a matter of time before the same becomes evident with respect to sold prices.”

Jeremy Leaf, a north London estate agent and a former RICS residential chairman, said: “Of all the housing market surveys, this one is arguably the most interesting, not just because it covers about six times more than the major lenders’ transactions, but it also includes cash buyers who have supported activity so crucially recently when mortgage payments have been in an uncertain phase.

“Now rates have stabilised, and the next move is likely to be downwards, particularly following lower inflation announced today, with demand improving.”


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Comments

Paul Essex

10:38 AM, 17th April 2024, About 2 months ago

I will add my usual observation. Using average rent is misleading as the average can increase purely by a removal of uneconomical low rent properties - even if every other rent stayed the same.

northern landlord

12:39 PM, 17th April 2024, About 2 months ago

Surely most prices are at their highest ever levels. That's inflation for you.

Cider Drinker

17:09 PM, 17th April 2024, About 2 months ago

Reply to the comment left by northern landlord at 17/04/2024 - 12:39
Exactly. These headlines are designed to fuel the anti-landlord rhetoric.

Rents tend to rise as landlords react to increasing costs and increasing uncertainty.

Rent rises will always lag rising costs because landlords need to wait until they are legally allowed to increase rents.

PAUL BARTLETT

20:08 PM, 17th April 2024, About 2 months ago

Reply to the comment left by Cider Drinker at 17/04/2024 - 17:09While the Bank of England Monetary Policy Committee meets every three weeks and is able to decide on 14 consecutive rate increases mostly followed by the Banks for anyone on Variable Rate mortgage products.
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Landlords need to wait a year to issue a Section 13 notice under the Housing Act so practically own all the financial risk.
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Rather blows a whole in the activist delusion that landlords can afford unplanned costs...

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