Rent in the UK continues to rise, with the average cost of renting a property increasing by £3,240 over the past three years, according to property site Zoopla.
Renters now face an average annual cost of £15,240, up about £270 per month since the end of the pandemic. Since then, the annual cost of renting has surged by 27%, compared with a 19% rise in average income over the same time.
Richard Donnell, executive director at Zoopla, said: “Private renters moving home have faced rents rising faster than earnings over the last three years.
“The number of rented homes hasn’t grown since 2016, creating scarcity for renters at a time when demand has boomed on a strong labour market and the rising cost of home ownership.
“Rental growth has slowed but we expect an ongoing lack of rental supply to keep an upward pressure on rents.”
Read more: 50 best products of the year, by Which?
Rents are rising fastest in Northern Ireland (10.5%) and the North East (8.7%), the two areas with the lowest average rents of £801 per calendar month (pcm) and £732pcm respectively. Overall, rents are 3.9% higher over the last year.
Average UK rents are expected to rise by 4% by 2025, with large cities and London lagging while rents rise in more affordable areas.
In London, rents are 3% to 6% higher than last year in cheaper areas of outer London, led by Havering (5.9%) and Barking & Dagenham (5.2%).
Rental growth is less than 1% in inner London areas, led by Tower Hamlets (0.3%), Greenwich (0.5%) and Kensington & Chelsea (0.8%).
Outside of London, rents are rising fastest in pockets outside major cities such as Rochdale (11.9%), Blackburn (10%), Birkenhead (9%) Burnley (8.9%) and Newcastle (8.7%).
Zoopla said this largely reflected “catch-up” rental growth as renters seek out areas with better value for money in and around major cities.
Zoopla said it does not expect a big increase in the number of homes for rent next year. The number of homes available remains below pre-pandemic levels in all regions except the East Midlands.
That is partly because private landlords have been selling off rental homes in recent years because of higher mortgage costs.
Read more: Almost 150,000 mortgages temporarily cut under new rules
Despite this, the property site said the peak of the private landlord sell-off has now passed, and that landlords would now be waiting to see when interest rates are lower to buy more homes, which will increase supply in the rental market.
Donnell said: “The ambitions to expand home building are important, as the quickest way to ease the pressure on renters is to boost the supply of private and social rented homes.
