Rents up by 11% in the last year alone
The cost of renting a home has hit nearly £1,000 a month as rents rise at their fastest pace for 14 years, said Zoopla.
The property portal said that newly agreed rents averaged £995 a month at the end of March, £88 more per month than at the start of the pandemic, according to its latest Rental Market Report.
It said the jump is being driven by a ‘shortage of properties to rent at a time when demand is soaring in city centres as students, office workers and international buyers make their return’.
But the rental market remains highly localised, and there are still areas where rental properties remain affordable, particularly in rural parts of the country.
In London, however, a single earner has to spend 52% on the average rent, which has soared 15.7% in the year to the end of March reaching £1,698.
Sarah Coles, senior personal finance analyst at Hargreaves Lansdown, said: “The property market isn’t actually defying gravity: the 11% hike in rents over the past 12 months has been the hidden string holding it up.
“Enormous pressure from runaway bills, rises in mortgage costs, and big drops in consumer confidence has historically meant house prices started to weaken. And while nobody is ruling it out eventually, for now they are riding high. Rising rents are the missing piece of the puzzle for those trying to understand how house prices are still rising so quickly.
“Rents have bounced back from falls during the pandemic, and are up 11% in a year. London, which suffered particularly during the race for space, has bounced back even harder – with rents up 15%. Rising rents knock increasing mortgage costs into a cocked hat, so moving from a rental property into an equivalent home with a mortgage will see your monthly costs fall.”