They have been rising since before the pandemic
UK tenants outside of London were being asked to pay an average £1,190 per month to rent a property, according to property listing platform Rightmove.
The figure – a record high – is the average monthly asking rent in the first quarter of the year, and continues the trend of quarterly rise in asking rents outside of London since the end of 2019.
In the capital, average asking rents have gone beyond £2,500 for the first time – also hitting a new record of an average £2,501 per month in Q1.
While supply remains limited compared to the larger demand for rental properties, Rightmove said there were signs that the situation would be a bit better this year.
“We have seen some early signs of improvement on squeezed supply levels this year, though with no significant influx of new properties becoming available to rent currently on the horizon, the mismatch is set to continue for some time,” Tim Bannister, director of property science at Rightmove, said.
“Although there are some early signs that the gap between supply and demand is starting to narrow a little, it will still feel very competitive for tenants trying to secure a home.”
Iwona Hovenko, real estate analyst at Bloomberg Intelligence, however, commented that the rental supply-demand imbalance is only likely to worsen in the near-term future, as smaller private landlords exit the sector due to high taxation, interest rates, and the steep costs to bring their properties to at least EPC band C in the next few years.
“Shortage of qualified labour and the still-high prices of materials may make that job even tougher,” Hovenko added. “Moreover, the same factors are also hitting the supply of new homes.
“Meanwhile – although housing market remains relatively resilient – the ranks of renters may continue expanding due to potential buyers being priced out by the high interest rates, lower mortgage affordability, as well as squeezed disposable incomes.
“Some would-be buyers may have also shelved their purchase plans while waiting for house prices to fall. All of these factors may be exacerbating demand for rental housing at a time when supply is likely to shrink further.”
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