Average rents in the UK appear to be continuing their upward trajectory, reaching an average of £1,171 PCM* (Up by 1.0% from October) according to the latest data released by HomeLet.*
Data from HomeLet’s recent Rental Index revealed that a year-on-year price rise was seen in every area across the UK, while the buy-to-let market continues to grapple with an imbalance of supply and demand. The most significant rise was recorded in the capital, with rents growing to an average of £1,989 PCM – an increase of 2.3% in London.
The North East also recorded the largest monthly variance, with rents 2.3% higher in November than the month prior, up to £623 PCM.*
Demand is pushing upward pressure on rents
Demand within the UK rental sector is continuing to outpace supply, and tenants have fewer options on the market than ever. This has led to rent increases throughout the UK, as landlords are pricing to keep up with demand and local competition. The private rented sector is crying out for more landlords, as too many investors are abandoning the market at a pivotal time due to economic uncertainty.
The lettings market is unseasonably busy. We aren’t seeing the typical slowdown we’d expect around the holiday season. The remarkable lack of stock may be to blame, at 30% lower year to date than in 2021.
Rising interest rates create more renters
In the wake of the former chancellor’s ‘mini-budget,’ it’s understandable that fast-rising interest rates may have pushed thousands of potential first-time buyers to put their plans to one side for the time being and opt for renting instead.
Although buyer confidence may be returning since the anointment of the new chancellor, there may be a long road ahead before the sense of economic uncertainty ceases to loom over the property market for some potential buyers.
Andy Halstead, HomeLet & Let Alliance Chief Executive Officer, said: “A lot has happened in the past few weeks with (another) new Prime Minister appointed, but away from the chaotic scenes on Downing Street, things are much more predictable in the rental market, with prices continuing to rise monthly.
“The average rental price in Greater London is creeping towards the £2,000 PCM mark, and the North-East, also saw a big month-on-month jump in the average rental price. That said, we have seen a slight slowing down in the rate of price rise in most other regions of the country.
“Our message has remained consistent, that the continued trend of landlords leaving the market is likely to see prices continue to rise, with a lack of properties to meet demand bound to result in a more competitive race to secure a let for the average tenant.
“The rising cost of living has to be a concern for both tenants and landlords too. Any trend that sees more tenants unable to pay their rent spells bad news for everyone involved, increasing the importance of letting agent support for landlords.”
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