UK rents rocket by 46% in a decade

UK rents rocket by 46% in a decade

0:06 AM, 28th March 2024, About a month 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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Comments

AnthonyJames

21:55 PM, 31st March 2024, About a month ago

This Zero Deposits guy is just trying to promote his website, but it's strange all he talks about is the costs faced by tenants. As per other comments on this thread, what about the cost increases faced by landlords over this period ? Rents are bound to go up given the ever-increasing cost of insurance, repairs, mortgage interest, taxation, licensing etc etc. The interest rate rises have had a huge impact and many landlords are now running at a loss, so of course they have to increase their sole source of income.

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