The amount landlords are asking their tenants to pay each month in rent is increasing at its fastest rate in over a decade. According to figures provided by online property portal Zoopla, the average cost of rent outside of the nation’s capital saw a rise of around 5% in the 12 months preceding July of 2021, equating to an increase of approximately £450 each year for tenants. This surge in rent prices is the greatest escalation seen since the index began recording in 2008.
However, thanks to the thousands of renters fleeing London life during the lockdown period areas surrounding the capital have seen the average cost of renting sour by as much as 25%. The average costs of renting each month in the UK has held at £790, a sharp rise from £752 only a year ago.
Lending an explanation to the sudden surge in the rental prices being demanded by landlords, Zoopla commented that the rental market was “unusually” busy, with the return of full-time students and office workers resulting in high competition for rental opportunities within major cities. As demand across August was a third higher than that of the same month last year, on average rental opportunities are being successfully let within 15 days, the fastest rate since 2006.
However, despite this surge in interest for rental accommodation, whilst the demand may be there the number of available rental opportunities is a third lower than expected for this time of year.
Zoopla’s head of research Grainne Gilmore commented, “The strong levels of rental demand seen across the UK during August will moderate I line with seasonal trends, but overall demand for rental property is likely to remain higher than usual in the coming months a, amend this swing back to city life.”
“As ever, much will be dependent on the extent to which the current rules around COVID continue as they are. But given no deviation from the current landscape, the demand for rental property, coupled with lower levels of supply, will continue to put upward pressure on rents. In London, this will translate into rental growth returning to positive territory late 2021 or early 2022.”
Nigel Purves of Wayhome voiced concerns over how the increasing rent will affect those looking to find a new home within the private rental sector, saying, “This report shines a light on just how deep-rooted the UK’s property affordability crisis actually is. Despite the pandemic-induced exodus, rents in big cities continue to soar.”
The areas that saw the greatest increase in the amount landlords are asking their tenants to pay each month in rent was Wigan, with the cost of renting surging by 10.5% in the last year. Rental prices in areas such as Greater Manchester Mansfield and Nottinghamshire saw a rise of over 10%, with East Sussex, Hastings and Norwich following with rises of over 9% in the last twelve months.
Zoopla was also quick to mention that they believe the dramatic fall in rental prices within London have “bottomed out” and will soon recover as industry in the capital reopens and emerges from the outbreak. Compared to the same period in 2020, the average costs of renting in London during July had slipped by 3.8%, a welcome bounce back from the 10% fall London landlords faced back in the earlier months of 2021.
However, whilst this may be welcome news to rental property owners, this could be another nail in the coffin for those unable to get a foot onto the rental ladder as the record rent charges come alongside increasing number of landlords requesting guarantors and up to six months’ rent in advance.
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