Rents are rising at the fastest rate for five years
The amount of rent paid to landlords rose by two per cent in the 12 months up to January, according to Office for National Statistics figures. That’s the largest annual growth rate since February 2017.
But not all areas of the UK are being affected equally. Rents grew by 2.6 per cent in Scotland, 2 per cent in England and 1.4 per cent in Wales.
While rental prices outside London were up three per cent in the last year – with the biggest rise seen in the East Midland where rents rose 3.6 per cent – the English capital recorded the lowest rise across the UK, up just 0.1 per cent.
The small increase reflects a decrease in demand for London rents, according to experts, with the impact of remote working still affecting demand in the city.
But elsewhere in the country the reality of rising rents is continuing to bite into earnings. Last week, property portal Zoopla reported that the average annual UK rental growth had hit a 13-year high with rents increasing to £939 by the end of 2021 – on average £62 higher than before the pandemic.
The rise means average rents are up nearly 12 per cent in the last five years and now account for 37 per cent of gross income for single earners.
Gráinne Gilmore, head of research at Zoopla, said: “As demand continues to outpace supply, there will be further upward pressure on rents, but affordability considerations will act as a brake on large rises.”
Meanwhile, separate figures also released by the Office for National Statistics on Wednesday, painted a similarly gloomy picture for homebuyers.
This is bad news for first-time buyers who will remain locked out of properties, according to Iain McKenzie, chief executive of The Guild of Property Professionals.
He said: “For thousands of people that were looking to get onto the property ladder before the pandemic, this could have put their first house out of reach.
“With mortgage approvals increasing, and demand remaining resilient, it is unlikely we will see a dramatic shift in the direction prices are going in the short term.”
But, once again, the disruption from Covid-19 has seen growth at its lowest in London where prices rose on average by 5.5 per cent.
However, this might be set to change according to Guy Gittins, CEO of estate agency Chestertons.
He said: “Whilst larger properties or homes with outside space remain sought-after, apartments in some of London’s more central boroughs are experiencing a steady comeback. This is particularly driven by professionals who are returning to the office and are seeking a home nearby.”
Both sets of ONS statistics demonstrate the difficulties thousands of people face in accessing affordable housing.
A spokesperson for Acorn tenants union told The Big Issue the combination of the cost of living costs and rising housing costs is a disaster waiting to happen and called for more social housing and rent controls to tackle the problem.
“Access to suitable housing is now out of reach for an increasing number of people, and with the cost of living crisis really starting to take hold this is a disaster waiting to happen,” they said. “That this news comes in the same week that bankers are reported to have received the biggest bonuses since the crash, and millionaire celebrities have said that all we need to do to afford a house is to cut back on the little pleasures in life, is an insult to the rest of us.”
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