Average private rents in Great Britain have climbed to record highs, with the amount tenants are being asked to pay in some hotspots rising more than 25% in a year, data shows.
The typical advertised private rent outside London for properties coming on to the market rose to a record £1,385 a calendar month in the third quarter of this year, according to the property website Rightmove.
The average London rent reached a new high of £2,736.
The site said it was the third consecutive quarterly record for advertised rents this year, adding that affordability for would-be tenants “remains very stretched”. Despite average earnings rising by 5% compared with last year, the cost of renting was swallowing up 44% of the average wage – up from 40% five years ago.
Rightmove also said conditions for landlords were challenging. It indicated that last autumn’s rise in stamp duty , as well as speculation about more tax changes in next month’s budget and the impact of the government’s renters’ rights bill, may be prompting some buy-to-let landlords to bail out and may be putting off others from investing in the sector. The renters’ rights bill has completed its passage through parliament and is awaiting royal assent.
The reasons for rising rents in recent years include demand for rental properties outstripping supply, the pandemic and its fallout affecting how people live and work, and buy-to-let landlords passing on increases in their costs caused by higher interest rates, or deciding to sell up.
Citizens Advice said this month that its analysis of official spending data and information collected from clients found that private renters – along with single parents – were particularly likely to be struggling with the cost of living.
The charity added that it was not unusual for some people’s rent to be more than half their take-home pay.
Rightmove said the number of homes available to rent was 9% higher than this time last year, but added that this figure was still 23% below what it was in 2019.
Meanwhile, the pace at which fresh rental properties are coming on to the market has slowed in recent months and is now just 1% ahead of this time last year.
The website’s data disguises wide regional variations, with some are subject to big increases in the typical sums paid by new tenants.
Topping the list of hotspots was Fulwood, a suburb of Preston in Lancashire, where the average asking rent is said to have increased by 32% in a year, from £970 a month to £1,284.
Close behind were the market towns of Keighley in West Yorkshire and Frome in Somerset, each with a 27% increase over the year, followed by Newquay in Cornwall (23%) and Gainsborough in Lincolnshire (22%).
Other areas reporting growth of at least 17% include Burgess Hill in West Sussex, Billericay in Essex and Paisley in Renfrewshire, which has just been named Scotland’s town of the year.
Daniel Fisher, head of lettings at the estate agent John D Wood & Co, said tenant demand had eased as a result of wider economic and political uncertainty making people more cautious about moving, while at the same time many landlords were hesitant to invest.
“The result is a slower, more cautious market that’s likely to remain uneven over the next year or so,” he added.
