Private rental prices in the UK increased by 2.7 per cent in the year to April, up from 2.4 per cent in the previous year; the increase was the highest annual growth rate since the ONS (Office for National Statistics) started tracking the prices paid by tenants renting properties back in January 2016.
Excluding London, rental prices in the United Kingdom actually grew by an even more significant amount – 3.4 per cent in the year to April 2022, up from 3.3 per cent in March.
Although lagging behind other regions, private rental prices in London climbed by 1.1 per cent in the year ending April 2022, up from 0.4 per cent in March 2022; this was the city’s biggest annual gain since November 2020.
Despite the relatively large increase in recent months, London’s rental price growth remains the lowest of any English region. The ONS researchers suggest this could be a result of the coronavirus epidemic reducing demand; for example, remote working modifying housing preferences so that people no longer needed to reside close to their offices.
The East Midlands actually saw the highest annual growth in private rental prices with a rise of 4 per cent. This was followed by the East of England and the South West which both enjoyed growth of 3.7 per cent.
By country, private rents in England rose by 2.5 per cent; in Wales the rise was slightly lower at 1.7, while in Scotland the rise was higher at 2.9 per cent in Scotland. The annual rate of change for Northern Ireland in April 2022 is over double the other UK countries at 6.5 per cent. The research authors don’t offer an explanation of why this might be although this data is based on an earlier set of figures.
According to new data by Rightmove, the average monthly mortgage payment for a typical first-time-buyer home has increased by 13% (+£100) since December last year following four interest rate rises, this is 11% (+£87) higher than ten years ago.
By contrast, equivalent monthly rental payments are 40 per cent higher than ten years ago. In fact, new research out today by property listing website Rightmove shows that rents are currently rising at the fastest pace it has ever recorded.
According to the Association of Residential Letting Agents (ARLA), increasing rental prices and lack of available stock are making it difficult for tenants to move to a new property, which has led to the average tenancy length increasing to 23 months.
This ties in with the news we published last week that tenants are staying in their current properties for longer to avoid getting hit by rental increases and they are also keen to rent properties where the bills are included.