If you’re currently renting in one of the UK’s major cities, you’ll know the score. Rents have skyrocketed in the years since lockdown, and aspiring renters in London have been particularly badly hit, with horror stories abounding of bidding wars for distinctly average properties driving rates even higher or turning up for a viewing only to be met by 20-odd fellow hopefuls.

It’s a bleak picture, and according to the new rental market report from Zoopla, it seems unlikely to improve any time soon.

Their report found that rents have increased 20% on average over the last three years, equating to an extra £2,200 per year – according to the i paper, average wages have only increased by 15.9% over the same period. Over the last 12 months, average rents for new lets have risen by 11.1%, while average earnings have jumped by 6.7%. No wonder we’re feeling the squeeze.

“The residential rental market has been running hot for two years, with something of a perpetual boom in residential rents which continue to run well ahead of earnings growth,” the report explained.

Demand for rented homes is 10% higher on average than this time last year; meanwhile, a third fewer homes are available for rent than normal, creating a major issue with supply and demand.

“The rental market has been running very hot over the last year,” said Richard Donnell, Zoopla’s executive director of research.  “It’s a growing area of concern for renters who face a market with 33% fewer homes for rent than normal. Government policies to support economic growth have boosted demand for rented homes at a time when the number of homes for rent has hardly changed since 2016.”

“Low supply exacerbates rental growth,” he added. “In local areas where rents for new lets have jumped the most, there is a risk that rents may over-shoot sustainable levels.”

At the same time, higher borrowing costs have made it harder for some renters to leave the sector, keeping them trapped in the market.

Although Zoopla’s report predicts that rental inflation for new lets will slow down to between 4-5% by the end of the year, a decrease that’s likely to be most significant in inner London and other popular areas, they are still expecting rental properties to remain scarce, “given the weaker economics for investors” against a turbulent financial backdrop. Demand, therefore, is still likely to remain above the five-year average. 

Are there any glimmers of hope on the horizon? “Ongoing completions of build-to-rent schemes will be one bright spot,” according to Zoopla, “adding supply at the mid to upper end of the market across UK cities.” There’s also a chance that would-be sellers might decide to rent out the homes that they’re struggling to sell due to the “weaker sales market” – but Zoopla’s report cautions that “conditions aren’t sufficiently challenging at this stage for this to impact the outlook”.

The prognosis, then, is pretty gloomy. It’s certainly a stressful time to be a renter, which makes it all the more important to read up on your rights as a tenant. During the fixed term of a tenancy agreement, your landlord can’t increase your rent unless your contract includes a rent review clause allowing this. Check through your contract carefully, and contact the likes of Citizens Advice or Shelter for free, impartial advice. 

Images: Getty