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Rocketing rents are soaring to new record amounts in February 2023 despite the rising cost of living and interest rates impacting the economy.
The government’s Office for National Statistics (ONS) says rents have hit their highest level since records began in January 2006 and look set to rise even more.
Rents were up 4.7 per cent in the year to the end of February.
The highest and lowest regional rates were in the Midlands - with the East Midlands hitting a 4.9 per cent increase, while the West Midlands mustered just 4.0 per cent. The rise in London was 4.5 per cent.
“The change in private rental prices paid by tenants remained steady between November 2019 and the end of 2020. The annual percentage change in rents slowed in early 2021, which was driven by the slowdown, and later reduction, of London rental prices.
“This may have reflected lower demand in London because of the coronavirus pandemic. For example, remote working meant workers no longer needed to live close to offices, and housing preferences changed.
“Private rental prices in the UK began to increase in the second half of 2021, with annual growth across all regions except London, where prices decreased. The percentage change in rents increased across all regions in 2022. This has continued in early 2023.”
Other property experts echo the sentiments of the ONS.
Letting agent trade body ARLA explains ‘the market is out of balance’ as demand from tenants hugely outweighs the supply of homes to rent.
The Royal Institution of Chartered Surveyors (RICS) agrees tenant demand is rising but notes the rate of decline in landlord instructions is slowing.
The ONS confirms the East Midlands is the country’s buy-to-let hotspot, as the region was also where rents rose the most in 2022.
Property experts at Homelet, a tenant referencing firm, say the average UK rent in February was £1,175 monthly.
Renters are paying more than 10 per cent more on a new or renewed tenancy than a year ago.
Andy Halstead, HomeLet CEO, said:
“A small decline in rental prices at the start of 2023 has not continued, with the average rental property in the UK again seeing a price rise.
“Something interesting is happening in the capital, though, as the average rent in Greater London has decreased for the third month in a row, having briefly climbed above the £2,000 a month mark in November for the first time ever. It is still a little early to predict whether this will be a sustained pattern or whether London will follow the pattern of the wider country and see prices rise again in the coming months.
“As a wider point, the rental market continues to suffer from a lack of available properties to meet surging demand, with many landlords choosing to leave the market. If the number of properties available fails to increase in line with demand, then prices will inevitably remain high and climb even higher as the battle between tenants to secure a property intensifies.”
Region | Feb-23 | Feb-22 | Yearly change | Jan-23 | Monthly change |
Greater London | £1,975 | £1,757 | 12.40% | £1,989 | -0.70% |
North West | £951 | £860 | 10.60% | £941 | 1.10% |
Scotland | £839 | £760 | 10.40% | £839 | 0.00% |
Wales | £800 | £727 | 10.00% | £804 | -0.50% |
South West | £1,092 | £999 | 9.30% | £1,085 | 0.60% |
West Midlands | £870 | £800 | 8.80% | £865 | 0.60% |
Yorkshire & Humberside | £794 | £730 | 8.80% | £790 | 0.50% |
East of England | £1,124 | £1,037 | 8.40% | £1,112 | 1.10% |
East Midlands | £807 | £745 | 8.30% | £803 | 0.50% |
South East | £1,233 | £1,139 | 8.30% | £1,128 | 0.40% |
North East | £629 | £583 | 7.90% | £623 | 1.00% |
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UK | £1,175 | £1,064 | 10.20% | £1,172 | 0.30% |
UK excluding Greater London | £983 | £897 | 8.90% | £977 | 0.60% |
Source: Homelet