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Rent inflation at the highest level for 14 years, says Zoopla

57869777 10820987 The average rent in London is 1 698 a month and this two bed fla a 4 1652700489021

Tenants are under increasing financial pressure as new figures show average asking rents have jumped to almost £1,000 a year.

Zoopla found that average asking rents are now £995 per month, up £88 per month from the start of the pandemic.

But the average rent in London is £1,698, up £73 since the pandemic began more than two years ago. This equates to £20,376 for a one year lease.

Overall rents rose 11% year-on-year, the highest rate of growth in 14 years – a strong rebound from a year ago, when average rents fell more than 1%.

The average rent in London is £1,698 a month – and this two-bedroom apartment in North West London is to rent for just under that at £1,500 a month via New Circle letting agents Estate.

The average rent in London is £1,698 a month – and this two-bedroom apartment in North West London is to rent for just under that at £1,500 a month via New Circle letting agents Estate.

How much is rent near you?  Average rents are £995 across the country, but this ranges from £1,698 in London to £573 in the North East.

How much is rent near you? Average rents are £995 across the country, but this ranges from £1,698 in London to £573 in the North East.

This increase has led to a significant increase in the proportion of gross income spent on rent.

This is particularly the case in London where it has risen to 52% for a single income, a level not seen since March 2020.

It drops to 26% for flatmates and means a new tenancy agreed for average rent in London will cost over £20,000 in rent over the next 12 months.

This is evidence of growing pressure on tenants who are already facing the cost of living crisis.

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The average rent in Britain is now more than a third of gross income, at 37%, for a single income.

About a third of tenants live alone, according to the English Housing Survey.

RENT GROWTH SINCE MARCH 2020 AS A PERCENTAGE OF AVERAGE INCOME
average monthly rent increase
since March 2020
in % of the average
monthly earnings
S West £127 5%
Wales £93 4%
E mediums £93 4%
North West £82 3%
Y&H £81 3%
East £95 4%
Its £98 3%
W Mediums £78 3%
Northeast £65 3%
London £73 2%
Scotland £41 2%
UK £88 3%
Source: Zoopla

There has also been a strong rebound in rental growth in London after the 10% falls seen last year.

Average annual rent growth in the capital reached 15% at the end of the first three months of this year, driven by demand for apartments from students, office workers and international demand.

Demand for rental properties continues to outstrip supply nationwide, according to Zoopla.

This is driving up rents, although the rate of rent growth will slow in the second half of the year, the real estate website added.

With tenants facing increased pressure on their disposable income, there has been a marked increase in the number of tenants deciding to stay longer in their rental property.

Tenants are typically staying in their rental properties for an additional five months compared to five years ago, with the average rental length up to 75 weeks, up from 51 weeks at the start of 2017.

This trend extended beyond closings when the ability to move around was hampered, and Zoopla suggested this indicates that landlords with existing tenants may not be increasing rents at the same rate as rent growth.

Rental demand is strongest in Scotland, Wales and London, with demand levels more than 65% above the five-year average.

The London market is also one of the most constrained in terms of inventory levels, with homes available to rent at just over half the 5-year average, creating the conditions for a sharp rise in rents. .

Parts of Somerset offer more affordable rents, with this two-bedroom terraced house in Martock available to rent for £795 a month via letting agents Martin & Co.

Parts of Somerset offer more affordable rents, with this two-bedroom terraced house in Martock available to rent for £795 a month via letting agents Martin & Co.

The rental market remains highly localized, with the most affordable rental markets for dual-income people being located in more rural areas.

These include Great Yarmouth in the East of England, South Somerset in the South West and North East Lincolnshire in Yorkshire and the Humber.

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In these markets, average rents represent up to 15% of common gross income.

In London, Bromley is the most affordable rental market, where average rents represent 19% of common gross income.

In the North West, Copeland, a local authority bordering the Lake District, encompassing the towns of Whitehaven and Cleator Moor, is the most affordable rental market.

Gráinne Gilmore, of Zoopla, said: “Rent growth is being driven by strong rental demand and limited supply, with trends more pronounced in city centres.

“The surge in post-pandemic pent-up rental demand will normalize over the coming months, which means rental growth levels will start to subside.

“Affordability considerations will also begin to limit future rent growth, although this may occur at different times depending on location.

“Rents should continue to rise for longer in areas where inventory levels are most constrained – currently London, Scotland and the South West.”

Gareth Atkins, of Foxtons, said: “The number of rental renewals we have seen so far in 2022 is unprecedented.

“Steady increasing demand, very limited stock and rapidly rising rental prices are all compelling reasons to renew – and tenants are responding.

“We saw a 29% increase in year-over-year renewals compared to 2021. Tenants are also choosing longer rentals to avoid a changing market; the duration of our renewal contracts increased by 9% in 2022, reaching an average lease term of 15.7 months.

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