Record rent rises revealed by latest official PRS data
UK rents increased by 6.2% in the year to December 2023, unchanged from the previous month’s figures but still the joint highest annual percentage change since 2016.
The ONS Index of Private Housing Rental Prices shows a rise of 6.1% in England, 7.1% in Wales and 6.3% in Scotland – up from 6.2% and the highest annual rate in the country since 2012. London saw the highest annual percentage change at 6.8%, down slightly from the record-high increase of 6.9% in the 12 months to November, while the North East experienced the lowest rise at 4.6%.
Newly let
The ONS explains that its figures are lower than Zoopla’s and Rightmove’s because it bases estimates on a mixture of newly let properties and existing lets rather than just new lets. Figures from CityLets, for example, cite year-on-year growth for average rents in Scotland (new tenancies) at 12.9% - a double digit rise for the fifth time in a row since the introduction of the Cost of Living Act.
Jeremy Leaf, north London estate agent and a former RICS residential chairman, says shortage of stock, partly caused by landlords leaving the sector in response to worries over the tax and regulatory regime, partnered with seemingly unstoppable demand are to blame for the overall rise across the UK.
Ambitious rents
However, he adds: “In the early weeks of 2024, we have noticed an increase in supply which has helped to keep a lid on some of the more ambitious rents and the gap with demand is narrowing.”
London agent Chestertons reports that there are now more rental properties for tenants to choose from than any other time since Covid. It is marketing about 45% more properties to rent compared with last year, partly due to many three-year tenancies agreed by tenants at lower-than-average rates during the pandemic coming to an end. In December, it saw 46% more of its landlords agreeing to a rent reduction compared with the year before.
Rightmove’s rental tracker found rents hit a record high for a 15th consecutive quarter in the summer of 2023.
Average advertised rents outside London are now 10% higher than a year ago at 1,278 a month, according to the property site. In the English capital, rents are 12% higher at 2,627 a month.
Zoopla found rents for new lets have risen almost 10% in the last year with an 11% rise in demand the main driver in the market.
Overall, the property portal found rents for new lets have increased by a third in the last three years, meaning tenants are spending an extra £3,360 a year on average.
As an agent it is hard to keep pace with these continuous leaps in rental values and often we find we are out of touch with where the market has moved.
The primary issue is a shortage of housing stock to meet the continued demand and the extended raft of legislation being placed onto landlords shoulders, meaning a lot of them are looking to leave the rental market.
These two factors primarily push up prices, meaning that no one really benefits, the government need to make changes to assist landlords and tenants alike. Big mistakes were made a few years ago with the abolition of the tenant fee ban and the governments continued tinkering with an industry they no little about
