The average UK rent just hit £1,051 per month as “chronic undersupply” of homes continues

Graphic depicting rising rents

Credit: Getty Images

Life


The average UK rent just hit £1,051 per month as “chronic undersupply” of homes continues

By Katie Rosseinsky

3 years ago

Soaring rental rates across the UK are rooted in a supply and demand problem, according to a new report from Zoopla.

UK rents have shot up by 12.3% over the last year, with the monthly average now hitting £1,051, according to a new report from Zoopla.

The report, which calculated its averages by looking at one- to four-bedroom properties, also found that the average single earner can now expect to spend 34.4% of their income on rent.

Rental growth was highest in London, increasing by 17.8%, a rate which Zoopla described as “simply not sustainable”. Outside the capital, growth was highest in urban areas such as Manchester (15.5%), Glasgow (14.4%) and Bristol (12.9%). 

This steep uptick in rent is linked to a “chronic undersupply” of properties, with the stock of homes for rent now 46% below the five-year average. Shockingly, Zoopla said that the average letting agent now has just eight homes available to rent.

This supply problem seems unlikely to change much in the immediate future while tenants stay put in order to try to avoid the increase in rents and while landlords continue to sell up “due to tax and regulatory changes”, they added.

“What the rental market needs to combat these challenges is more new homes for rent,” Richard Donnell, Zoopla’s executive director of research, said. “Greater regulation has seen less new investment and a small but growing number of landlords selling up, meaning the rental market has stopped growing since 2016.” 

Houses

Credit: Getty

As rents rise and energy bills skyrocket, tenants are also “shifting their focus” to smaller properties, the report found.

“We have seen a steady reduction in the proportion of renters looking for two- and three-bed houses, and an increase in demand for one- and two-bed flats over 2021 and 2022,” it said. “This trend has been accelerating in recent weeks.”

The lower running costs of a flat compared to a house may be a factor in this shift, the survey suggested, as renters are mindful of the sharp increase in energy bills (the recently announced energy price freeze will cap bills at £2,500, but this still marks a drastic jump from last winter, when the Ofgem price cap was set at £1,277).

“As cost of living pressures build, renters will be looking to balance the combined impact of rental and running costs as they make home-moving decisions,” the report said. “We expect the appeal of apartments and energy-efficient houses is set to rise further into 2023.” 


Images: Getty

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