OFFICIAL: Rental property shortage raises rents at fastest rate in seven years

3
1412
rental stock

UK private rental prices increased by 5.3% over the past year – up from 5.2% in the 12 months to June – recording their highest annual rate since 2016.

Rents for new tenancies were up by 5.2% in England, 6.5% in Wales, and 5.7% in Scotland in the year to July, according to the latest ONS data, which shows the highest annual percentage change was in the West Midlands, Yorkshire and the Humber, and London, at 5.5%, while the North East saw the lowest at 4.6%.

Prices in London (which account for almost a third of UK rental expenditure) experienced the highest annual percentage change since 2006, while private rental prices in Northern Ireland increased by 9.2% in the 12 months to May 2023.

The ONS explains that growth in the region has slowed since the peak of 10% in the 12 months to March, but that it remains higher than for other UK countries. 

Pressure

Nathan Emerson, Propertymark CEO (pictured), says the huge disparity in the number of properties available to rent compared to the continuously growing number of renters looking for a home, continues to put pressure on rent prices.

nathan emerson fraud

He adds: “UK governments need to urgently address the problem and look to adequately incentivise the provision of desperately needed homes rather than forcing landlords out of the private rented sector with unfair regulatory and financial hurdles.”

Extreme

Price increases in the lettings market are less extreme than last year, believes Gareth Atkins, lettings MD at Institutional PRS and Build to Rent, who says: “We’ve seen expected growth and are now into a more consistent busy market we normally see at this time of year.

“As such, the market will remain highly competitive through the summer. This July, as the seasonal rush began, there was an average of 21 renters registering per each new instruction in London.”

Read more about why there's a shortage of stock.

3 COMMENTS

  1. “UK private rental prices increased by 5.3% over the past year”

    Inflation topped 10% earlier in the year and is still at 6.8% (July 2023) so a 5.5% “Rise” is actually a rent CUT for investors especially when a 1 year fixed term savings can give 6.1% with zero effort!!!

    Wording is important, so is reality. The article should have a headline of “Landlords face cut in income” rather than tenants face rent increase.

    Investors will continue to leave the sector until the Business model becomes viable.

    Over time leveraged investors will have little choice but to exit as they’re previous mortgage fixes of 2 or 3% end and turn into 6 or 7% If things appear “Tough” for tenants now then in two years from now things will be a whole lot worse.

    In this video that has just been posted (06/08/2023) James Shack a financial advisor goes through the numbers of a client’s situation as it was in 2017 and how it is today. (They have a couple of BTL’s only so will be very interesting to lots of people who post on here)

    It’s a definitive breakdown of the finances relating to BTL. It is equally useful to TENANTS that post on here as it is to INVESTORS in understanding the state of the BTL market.
    https://www.youtube.com/watch?v=NtVk3ERt66w

    This is what the future looks like when the landlords exit the PRS as happened in the 1970’s due to over regulation of the sector.

    Wikipedia…
    “History. Cardboard City was first occupied in 1978. In the mid-1980s the site, in the pedestrian underpasses under the Bullring roundabout near Waterloo station, was home to up to 200 people sleeping in cardboard boxes”

LEAVE A REPLY

Please enter your comment!
Please enter your name here