Within the tumultuous landscape of the UK rental market, tenants find themselves navigating the daunting terrain of surging rent prices and fierce competition for available properties. The challenges are twofold, as the cost of rent reaches new heights, amplifying the strain on tenants in their pursuit of suitable housing amid an increasingly demanding environment.
Medium UK Rent Cost Reach new heights
In the final quarter of 2023, the average rent prices outside London experienced a significant increase, reaching £1,280 per month, as reported by property site Rightmove. This marks a mere 0.2% increase from the July to September period. Despite this, it signifies a record high for the 16th consecutive month. The annual change reveals a 9.2% increase from 2023, representing the slowest yearly growth rate since 2021.
Rightmove Director Tim Bannister commented on the weakening demand, stating, “We can’t keep seeing double-digit rent rises every year as tenant affordability simply cannot keep up.”
The recent report highlights the chaos surging rental prices have caused for tenants seeking new properties, prompting landlords to reconsider their pricing strategies. The number of tenants inquiring about moving has decreased by 13% compared to the previous year.
To summarize, every available rental property is now attracting 11 inquiries, a decrease from the 14 in the preceding year but still significantly higher than the four recorded in the same period five years ago. In a statement, Rightmove noted, “The market remains busy compared to pre-pandemic levels.” However, early signs indicate a potentially improved experience for tenants securing rental properties in 2024.
Analysts express optimism for the upcoming year, attributing it to the gradual rise in rental supply. The recent report indicates a 7% yearly surge in the number of properties entering the market. This shift is anticipated to help curb rising rent prices driven by unsatisfied demand.
National Quarterly Fluctuations in Average Rental Prices
Despite underlying trends, Rightmove highlights substantial regional variations in the UK rental market. In the last three months of the previous year, London rents reached a new peak at £2,631. This contrasts with the national average monthly rent of £1,280, reflecting a periodic increase of £4 and a 6% annual rise.
On the opposite end of the price scale, the North East emerges as the most affordable place to rent in the United Kingdom, boasting an average monthly rental value of £865.
In contrast, Scotland, the South West, and the South East are the only three regions that observed a decline in advertised rents in the last quarter of the previous year compared to the preceding three months.
Considering rising property prices, it becomes crucial to factor in inflation and wage growth to assess the impact on tenants.
The most recent figures on housing affordability, released by the ONS at the end of October, encompass the financial year ending in March 2022. These figures reveal that in England, private renters with an average household income would expect to allocate more than 25% of their wages to an average-priced rented property, compared to 23% in Wales and 25% in Northern Ireland.
London is graded as the least affordable region in the UK, with an average rent comprising approximately 35% of the average income.
Considering the upcoming year, Rightmove forecasts a 5% increase in median rents outside of London and a 3% increase within the renowned capital.
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