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Rental growth slows to lowest level for 30 months

Rental growth slows to lowest level for 30 months
Christina Hoghton
Written By:
Christina Hoghton
Posted:
07/06/2024
Updated:
07/06/2024

Despite the dip, rents are still rising, and there are 15 people competing for every rental property.

That’s according to Zoopla, which found that annual rental growth has slowed to 6.6%, its lowest level for 30 months.

The property portal said that the average monthly UK rent now stands at £1,226 per month.

There are still 15 people competing for every property for rent, more than double the pre-pandemic average.

Available supply has grown by almost a fifth over the last year, but there are still a third fewer homes for rent than pre-pandemic.

Regional falls

Rents have fallen over the last quarter in some regional cities including Nottingham (-1.4%), Brighton (-1.1%), York (-0.4%), Glasgow (-0.4%), Cambridge (-0.3%) and London (-0.3%).

Zoopla said this is being driven by affordability constraints, which is a growing challenge for renters. The proportion of gross earnings spent on rent is at the highest level for 10 years across all regions and countries, ranging from 41% of gross earnings in London to 21% in Scotland.

Richard Donnell, executive director at Zoopla, said: “The increase in the cost of renting has slowed to a 30-month low. Rents continue to grow faster than average earnings, although the gap is much narrower than a year ago.

“Rental demand continues to run well ahead of available supply, which is keeping the upward pressure on rents, but there are some areas where rental growth has stalled.

“Growing the supply of rented homes, both private and affordable, should be among the top housing priorities for the next Government.”

Nicola Thivessen, director of group compliance at KFH, added: “It is positive to see rental inflation at its lowest in 30 months, although demand for available property remains high, with supply still one-third lower than pre-pandemic.

“As we head into the peak summer period, the sector would benefit greatly from a continuation of more available homes to rent, which would help level out the ongoing imbalance between supply and demand, easing the pressure off tenants in terms of affordability.”

Related: Tenant demand still strong, say 83% of landlords