Demand for rental homes is far outstripping supply, making it increasingly difficult and expensive for tenants to find accommodation, according to surveyors.
Research by property website Zoopla found that average national rents increased by 11.1% in the year to January. A survey carried out by the Royal Institution of Chartered Surveyors (RICS) anticipates a further increase of 4% in the year ahead. It said that all parts of the UK will see rents rise in the next 12 months.
The RICS also reported that the demand for rental homes hit a five-month high in March.
Along with rising rental costs, tenants are seeing their budgets squeezed by increases in council taxes, energy bills and the price of their food shop.
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Rising mortgage rates and new regulations are fueling the fire
The Zoopla report found that supply of rental properties has remained broadly static, with 5.5 million private rented homes in Great Britain in 2021. This is up from 5.4 million five years prior.
RICS surveyors reported that in some instances, landlords are selling their homes instead of continuing tenancies.
One possible reason for this is interest rates have risen sharply over the last year, meaning some landlords are finding it difficult to cover their mortgage repayments with income from rents. This means they must either raise rents, or sell up.
Secondly, surveyors cited the introduction of new taxes and government regulations as factors putting off landlords from continuing to let their properties. One example of this is the forthcoming Renters’ Reform Bill, set to ban landlords from evicting tenants without a valid reason.
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The demand for rental properties has jumped
Meanwhile, the demand for properties has also increased dramatically. Zoopla found that rental inquiries received per estate agency branch peaked in summer 2022, at double the five-year average.
The report attributed the jump in demand for rental properties to record high net immigration, with 504,000 people arriving in the UK in the year to June 2022. This occurred due to a government shake-up of visa rules in an attempt to attract skilled workers to the UK.
Furthermore, there was a significant increase in the number of foreign students arriving in the UK, further boosting the demand for rental properties.
Find out about your rights as a tenant, including what you can do when facing rent hikes and evictions.
How much have rents gone up in my area?
While the national average rent increased by 11.1% in the year to January, according to Zoopla, the exact figure varies between regions.
Below are the annual increases in rent across different parts of the UK for the year to January 2023.
London is leading the charge, with a spike in the average annual rent of 15.2%. According to Zoopla’s report, the equity a landlord needs to invest in a rental property in the capital has jumped from £129,000 to over £257,000, or 50% of the property’s value.
Rent prices in the North West have also risen sharply in the past year – by 11.1%. In Scotland, this is even higher at 13% – or £712 per tenant.
| regions | Average rent | Annual increases (January 2023) |
| United Kingdom | £1,119 | 11.1% |
| United Kingdom (excluding London) | £923 | 9.4% |
| East Midlands | £803 | 9.4% |
| East of England | £1,070 | 8.7% |
| London | £1,978 | 15.2% |
| Northeast | £631 | 8.4% |
| Northwest | £778 | 11.1% |
| Northern Ireland | £688 | 5.7% |
| Scotland | £712 | 13% |
| South East | £1,229 | 8.9% |
| Southwest | £1,008 | 8% |
| Wales | £812 | 10.3% |
| West Midlands | £831 | 9.6% |
| Yorkshire and the Humber | £743 | 9% |
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