New research has revealed that rents in Great Britain have grown at their fastest annual rate in 16 years.
National average asking rents outside London hit a new record of £1,126 per calendar month (pcm) by the end of the second quarter of 2022 (Q2), having risen 3.5 per cent since Q1 – the second highest quarterly rise in ten years – and 11.8 per cent year-on-year. This is the highest annual rate analysts at property portal Rightmove have ever recorded in its 16 years of reporting.
These fresh figures show rents have risen by 19 per cent (+£177) since the start of the pandemic two years ago.
According to the data, rents in the capital have also continued to rise as London hit a new record average asking rent of £2,257 pcm. Annual growth in asking rents in London has risen to 15.8 per cent, the fastest ever rate in any region.
The analysts say that average rents continue to be driven up by a shortage of available rental stock, which is down 26 per cent compared to last year, while demand is up 6 per cent, meaning competition between tenants remains high.
Due to the continuing property shortages, Rightmove’s analysts have revised their rental forecasts from a predicted 5 per cent to 8 per cent growth by the end of the year.
Despite this quarter’s data, the researchers say there are signs of improvement with the number of new rental listings up 8 per cent since the start of the year while June enjoyed a higher number of listings than in preceding months.
The research has also revealed that although landlords face challenges such as navigating legislation changes and potential updates to EPC requirements, there is significant confidence in the market with a larger number (34%) of those surveyed saying that they are planning to expand their portfolio than reduce it (11%).
Tim Bannister, Rightmove’s Director of Property Science, commented: “The story of the rental market continues to be one of high tenant demand but not enough available homes to meet that demand. Last year we saw exceptional numbers of tenants looking to move and this year we have seen no let-up in this trend.”
The research also revealed that average rental yields are up across every region with the North-East topping the table with yields of 8.1 per cent (+0.6%YOY), followed by Scotland at 7.3 per cent, Wales at 7.0 per cent and the North West at 6.8 per cent.
By city, the nation’s average asking rent hotspots were Manchester in the North West (up 23 per cent YOY), followed by Chatham in the South East (+21.4%), Liverpool in the North West up 19.4 per cent and Weymouth in the South West up 19.1 per cent.