UK rents grew 3% last year
Twenty areas in the UK have seen the average rent paid for a residential property grow by more than 3% over the last year, according to the latest Landbay Rental Index.
The current pace of growth means a tenant in Luton (the area with the fastest growing rents at 6.5%) is now paying an extra £528 over the year on rent, bringing total annual rent paid to £9,354.
For someone in Northamptonshire, where annual rental growth reached 5.1%, rents have grown by £409, in Peterborough by £340 (4.8%) and in Edinburgh by £521 (4.6%).
The findings reveal the growing affordability crisis facing the 4.3 million tenants in the UK, and follow government commitments outlined in this week’s Housing White Paper to create a fair and better-served private rented sector.
The white paper also highlighted the growing proportion of income tenants are currently spending on rent, sending roughly half their salary to their landlord each month.
Landbay’s analysis found that tenants in nine of the 20 areas with the fastest growing rents are currently spending over 60% of their take-home pay on rent. A tenant in Luton for example, currently spends an average of 68% of their disposable income on rent, with tenants in Brighton & Hove, Bristol and Thurrock spending an average of 69%, 64% and 63% respectively.
John Goodall, CEO and founder of Landbay said: “There are currently 4.3 million tenants in the private rented sector but affordability is becoming an issue across many parts of the UK. Whether tenants are renting as a stepping stone on the way to home ownership or, increasingly, renting for life, people rely on a well-served buy to let market to ensure rental growth doesn’t become unbearable.
“Government attention has tended to focus on regulating so called ‘accidental’ landlords, so the step change in this week’s white paper to focus on supplying more rental properties suggests that the sector may finally be given the investment it needs to keep rents in check.”