Average rents hit another record high

Posted on Thursday, April 18, 2024

UK private rents increased by an average of 9.2% in the year to March 2024, the latest government figures revealed yesterday, which was the largest increase since 2015.

The data from the Office for National Statistics (ONS) showed this was higher than the 9% increase recorded in February.

In England, average monthly rents rose by 9.1% to £1,285 per calendar month (pcm), which was the largest increase since 2006.

There was a 9% hike to £727pcm for the average monthly rent in Wales, flat on the growth recorded in February and below the record inflation of 9.8% seen in November last year.

In Scotland, average monthly rents went up by 10.5% to £947pcm in the year to March, down on February’s annual growth of 10.9%. This was also a slowing from the record high annual increase of 11.8% seen in August last year.

In Northern Ireland, there was a 10.1% increase in average private rents over the 12 months to January.

Jeremy Leaf, north London estate agent, said: “Rents are still rising albeit a little more gently in response to the continuing imbalance between supply and demand.

“On the ground, we are finding affordability is the main reason although today’s news that the cost of living is not rising as fast will certainly help tenants, particularly those spending a high proportion of their salary on living costs.

“Most of our landlords also recognise that a good quality tenant is better than the highest possible rent, even though many are struggling to cover higher tax, mortgage and regulatory costs.”

Rachelle Earwaker, senior economist at the Joseph Rowntree Foundation, commented: “Historically high rent increases see no sign of slowing down, even as inflation falls. Renters across England are facing finding an eye watering extra £107 on average every month, while in London it’s £207 per month compared to a year ago. Even with the recent increase to housing benefit, this will leave many renters without any disposable income whatsoever. Renters who can’t absorb these costs risk being evicted from their home.  

“Meanwhile, progress on the Renters (Reform) Bill is uncertain, despite the government promising to end Section 21 evictions over five years ago. Everyone deserves a secure and affordable home. The Renters (Reform) Bill must give renters a better deal by abolishing Section 21 as well as addressing the affordability crisis for renters.”

Richard Rowntree, managing director of mortgages at Paragon Bank, added: “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.”

Via @PropertyIndustryEye