Flats saw biggest increase since start of pandemic amid tenants' return to London
Average rents in the UK have increased for the sixth consecutive quarter, the latest figures from the Deposit Protection Service (DPS) show.
According to its quarterly Rent Index, average rents now stand at £849 a month, a £15 (1.8%) increase on £834 in Q4 2021, and a £49 (6.13%) increase on £800 in Q1 2021.
The report also revealed that flats had the largest quarterly rise in rents during Q1 2022 — a first for the property category since the start of the COVID-19 pandemic, with rents rising £16 (1.89%) to £863.
Read more: Average UK rents reach 13-year high.
DPS also found evidence that some tenants are paying above the going rate to secure a property, with 15% saying they paid more than advertised rents to secure their property.
Of these overpaying tenants, 43% said they were desperate to secure a property, 26% said there was nothing else available, 11% said that the agent has asked them for a best offer, and 11% said they overpaid because they loved the property.
“Consistent quarterly rent rises – coupled with survey results that suggest that a proportion of tenants are overpaying to secure a property – underline the current intense demand for, and tight supply of, rental homes in the UK,” Matt Trevett, managing director at the DPS, said.
Read more: Tenant demand hits all-time high – research.
Paul Fryers, managing director of Zephyr Homeloans, shared that the squeeze on rental stock was also impacting landlords, who are increasingly looking further afield to secure a suitable rental property.
“Recently we’ve seen landlords looking to northern cities such as Manchester and Liverpool, which are the subject of recent government investment and where more landlords believe they may find healthier yields,” Fryers said.
The latest data showed that London rents have risen the most in value, increasing £34 (2.46%) on Q4 2021 and £90 (6.79%) since Q1 2021.
Read more: Hamptons: Inner London rents up 3.9%.
“Rents in London are also rebounding strongly, with average rents for flats in the capital increasing by £111, or just under 9%, during the past 12 months – more than three times the falls seen during 2020, when tenants perhaps sought out more spacious homes outside of the capital,” Trevett said.
“Accelerating rents for flats could signal the beginning of the end of the pandemic trend of renters leaving cities,” he pointed out.
Between Q1 2021 and Q1 2022, all UK regions registered an increase in average rents, with 10 out of 12 experiencing increases of more than 4%.
The largest percentage increase during the past 12 months took place in the West Midlands, where rents rose £49 (7.57%).
Rents during Q1 2022 decreased marginally in the South West by £1 (-0.12%), while rents in Yorkshire fell £2, or -0.34%, according to DPS.
