UK rents rocket by 46% in a decade

UK rents rocket by 46% in a decade

0:06 AM, 28th March 2024, About 9 months ago 11

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The average UK rent has climbed by 46% in the past decade thanks to surging tenant demand and limited rented home supply, research reveals.

According to Zero Deposit, it is the lack of available rental properties that is a key driver of this surge.

While the total number of rental homes reached an estimated 5.22 million in 2023, this represents a slight decline from the previous year and a significant drop from the peak of 5.38 million seen in 2017.

This imbalance between high demand and low supply has resulted in skyrocketing rents.

The average monthly rent reached a record £1,232 in 2023, marking a 9.7% increase from the previous year.

This follows similar annual growth rates of 9.7% and 5.8% in the preceding two years.

‘Cost of renting in the UK’

The firm’s chief executive, Sam Reynolds, said: “The cost of renting in the UK has climbed by an average of 8.4% per year in the last three years alone versus an annual rate of increase of just 2.3% over the previous seven years, which really demonstrates just how bad the problem has become for today’s renters.

“And while they had been afforded a small reprieve with restrictions on tenancy deposits introduced in 2019, last year was the first year that this cost has climbed since these measures were introduced.

He added: “This increase will only add to the huge financial obstacle many renters are already facing and make it even harder for them to successfully find, secure and maintain a tenancy within the private rental sector.”

Capping rent deposits

While the Tenant Fees Act 2019 introduced some relief for tenants by capping rent deposits, there’s been a recent reversal of this trend.

The Act, which limits deposits to five or six weeks’ rent depending on the annual cost, initially led to a decline in deposits paid.

However, figures show a 3.1% increase in 2023, with the average deposit rising to £1,026.

The total value of tenancy deposits held by government-approved protection schemes remains high.

Zero Deposit estimates this figure to be £5.15 billion in 2023, a significant increase from the £2.98 billion held in 2014.

‘The rental market has been growing consistently’

Mr Reynolds said: “It’s clear that our reliance on the rental market has been growing consistently over the last decade, however, demand for rental homes has exploded in recent years as soaring house prices have forced many to postpone their plans to purchase.

“Given the fact that house prices are only predicted to increase further this year, it’s unlikely that this cultural shift will change anytime soon.

“We simply don’t have an adequate supply of quality rental accommodation to satisfy this surge in demand and the consequence of this market imbalance has been a huge acceleration in the cost of renting.”


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Fed Up Landlord

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3:29 AM, 28th March 2024, About 9 months ago

A one dimensional article. No mention of the other main ingredients of this pseudo-culinary mess. Whilst a failure to build more homes is a major one, so too are:

1. Section 24 Finance Act - tax on turnover rather than profit. George Osborne and his successors in title got away with it while interest rates were low. Now they are higher, landlords with higher LTVs are being forced to sell;

2. Government and local authority regulation adding to costs- Tenant Fee Act, selective licensing, EPC regs ( now " cancelled" but for how long?)

3. The incessant anti- landlord rhetoric from all sides including the likes of Shelter, Generation Rant, Acorn, and the left wing of the Labour Party including Angola " Two Homes" Rantner. The Con- Lib- Servatives are no better. Trying to win votes and look " Kool down with da Gen Rent Kids" to win votes they wouldn't have got anyway was and is a stupid idea. Landlords are leaving as a result.

Mix all this up, add in a considerable slug of immigration, and - voila- increased rents. Well who would have thought it?

Cider Drinker

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8:54 AM, 28th March 2024, About 9 months ago

According to the Bank of England, CPI has increased by 32.3% over the same period and according to Hargreaves Landown, RPI has increased by 50%.

So rents rising by 46% is less than RPI and RPI is a more accurate representation of inflation.

In 2014, the minimum wage in the U.K. was £6.50. Today it is £11.44. A rise of 76%.

Cider Drinker

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9:22 AM, 28th March 2024, About 9 months ago

Population increased by around 5 million. Mostly renters.

David

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11:11 AM, 28th March 2024, About 9 months ago

My tenants have enjoyed low static rents for years but are now living in the past as most don't wish to pay increases and fail to acknowledge my additional costs.It is not just about supply and demand.
Rents are the last thing people seem to want to pay yet a roof over ones head is one of the basic essentials in life, which never seems to be explained to them, but then why would it be.Compared to the income of some of my tenants my rents are 25% of their income which i feel is far from excessive for the benefit they receive..
Rent deposits are a joke and far too low.

Cider Drinker

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12:48 PM, 28th March 2024, About 9 months ago

Reply to the comment left by David at 28/03/2024 - 11:11
My mi they rents average just shy of 40 x minimum wage. They will all be lower than LHA from April - for now.

Old Mrs Landlord

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8:34 AM, 29th March 2024, About 9 months ago

For £16.40 a day our tenants get a proper modern purpose-built one-bed flat (not a studio) with allocated parking, a washer-dryer, fridge-freezer and cooker, full bathroom with bath and shower all maintained and replaced as necessary, all service charges paid by us. That's less than some pay for daily parking and/or ULEZ charges, meals out or even cigarettes or vapes. In my view private rents are amazing value for money when you consider the relative value of a home compared with other consumables and utilities. When the retrospective changes to the conditions under which landlords are required to operate, meaning many struggle to remain solvent never mind make a return on their investment, are factored into the equation it is surprising there are any of us still providing this service. In the face of upcoming further costly restrictions, requirements, regulations and obligations a collapse of the sector seems almost inevitable. And still the vocal renters' lobby demand further changes "to redress the imbalance of power between landlords and their tenants". They have the ear of government but we have the houses.

Mick Roberts

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11:04 AM, 29th March 2024, About 9 months ago

Some'at wrong here.
Cause 46% in a decade is not rocketing up.
Nottingham's has gone up by about 80% in 6 years.

Mary Afolabi

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20:56 PM, 29th March 2024, About 9 months ago

House prices have gone up in the last 10 years by 71%. Add 3% tax if you are a landlord buying a property. What is the cost of boilers now, compared to 10 years ago? The cost of rewiring, or new roof have gone up a lot. Landlords should be praised for the low low 46% rise in rent. Nottingham's 80% sounds more realistic.

Lisa008

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8:38 AM, 30th March 2024, About 9 months ago

New rental agreements are a lot higher (in Nottingham) but people who have been in the same place for a long time are probably on under-market rents... I see a lot of properties like that going for sale with 'tenants in situ'.

Mick Roberts

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15:19 PM, 30th March 2024, About 9 months ago

Reply to the comment left by Lisa008 at 30/03/2024 - 08:38
Yes many under market rents. And we just hanging on. But every time a MP or Councillor speaks, another dozen Landlords then sells or puts the rent up.
Yes normal agents now selling with tenants in situ.
5+ years ago it was rare.

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