Double-digit rise in rents for 15th month in a row
Rent now accounts for a massive 28% of earnings – the most unaffordable level in 10 years
Average rents have risen by 10.4% over the last year to £1,126 a month, the 15th month in a row that there has been double-digit rent inflation, said Zoopla.
In London rents have risen by 13.5% over the last 12 months, to £2,001 a month.
The property portal said that an ongoing imbalance between supply and demand continues to push rents up across the UK, and it will continue.
However the growing unaffordability of renting will ‘start to act as a drag on rental inflation’ and growth is expected to slow to 8% by the end of 2023.
Unaffordable rent rises
Rental unaffordability has reached a decade-long high, added Zoopla, with UK rents growing faster than earnings for the last 21 months, since October 2021.
Average UK rents now account for 28.3% of average pre-tax earnings – the highest level for a decade. In London rent now averages 40% of gross earnings.
A supply and demand imbalance is pushing up rents, with the level of homes for rent stuck 20-40% below pre-pandemic levels in most regions. This means more renters chasing fewer homes.
Richard Donnell, executive director at Zoopla said: “Renters continue to face a relentless increase in rents, compounding wider cost of living pressures and making home moving decisions ever more challenging, especially for singles and those on lower incomes.
“The chronic imbalance between supply and demand continues to push rents higher but we expect increasingly stretched affordability will start to reduce the pace of rental growth into 2024.
“While there is concern over the impact of higher mortgage rates on those with mortgages, renters have already seen a £2,820 a year increase in rental costs over the last 5 years. Some renters are experiencing more stress from higher rents with a jump in those finding the rent difficult to pay.”