ONS Reports Record Rent Rises Over Last 12 Month
The Office for National Statistics (ONS) recorded a staggering 9.2% surge in rental prices over the past year. This is the highest annual increase since the ONS started collating information nearly a decade ago.
Although the is signalling a potential cool down in the near future. Here’s the scoop on the latest twists and turns: Buckle up, renters – the roller coaster ride in the UK rental market might be slowing down.
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Regional Rental Variance
Scotland takes the crown for the steepest % hike, with rents soaring by 10.5%. Average £947.
England follows closely behind with a 9.1% increase, while £1,285
Wales trails slightly at 9%. £727
Hotspots and Budget-Friendly Zones
London holds the title for the most substantial leap, boasting an 11.2% surge in rental costs. Kensington and Chelsea, the Capital’s opulent heart, remains the priciest rental spot, with an average monthly rent of £3,305.
Bristol emerges as the costliest destination outside London, with rents averaging £1,748 per month.
The north-east of England conversely sees a modest 6.1% uptick, offering some relief for tenants in the region.
For those seeking affordability, Dumfries and Galloway in Scotland also beckons with an average rent of £475, a pocket-friendly option amidst soaring costs.
Rapid Rise and Supply-Demand Dynamics
Renters will definitely have felt the pinch as prices surged from around £1,031 pre-pandemic to nearly £1,250 a month in March. Economists attribute the surge to a supply-demand mismatch, fuelled by increased rental demand due to housing market uncertainties and record migration levels.
Landlords, facing higher borrowing costs and regulatory pressures, have been cautious about expanding their portfolios, exacerbating the supply crunch. Many have also had to pass on the mortgage cost increases.
Looking Ahead
Letting agents anticipate a ceiling on tenants’ ability to absorb further rent hikes, signalling a potential plateau in rental inflation. Experts believe that rents will eventually have to fall in line with affordability criteria as salaries increases have struggled to keep pace. Especially in London affordability limits have had to be re-evaluated after these significant rental price increases. As the housing market sees a modest uptick in prices, economists foresee a potential slowdown in the coming months, especially with rising mortgage rates.
As the rental market roller coaster prepares for a potential slowdown, tenants and landlords alike await with bated breath to see what the future holds in store.
