The UK lettings market has experienced a historically significant increase in the average cost of rent in the 12 months to February.
The Office of National Statistics (ONS) reported on Wednesday that prices increased by 9 percent last month and represented the highest annual percentage change since 2015.
Price surges have been recorded across all regions of the country. Renters in England saw a hike of 8.8 percent, with figures for Wales and Scotland reaching 9 and 10.9 percent respectively.
For tenants in England this translates to an average monthly rent price of £1,276. London prices were the highest in England at 10.6 percent and lowest in the northeast at 5.7 percent.
In a blow to London renters, the surge in February represented the highest annual rise since 2006 and was up from 8.3 percent in January.
The highest average private rent in the country was recorded in Kensington and Chelsea (£3,248) and lowest in Dumfries and Galloway (£472).
This means that tenants are unlikely to benefit from a significant financial relief as the demand continues to rise. The demand growth pace in the lettings market is “modest,” the survey acknowledged, but added that rents will get higher, albeit at a slower rate.
Rising interest rates set by the Bank of England (BoE) in the course of the past two-and-a-half years have affected homeowners, who were often unable to make their increased mortgage payments. More people turned to renting, which in turn led to higher demand and a spike in prices.
On Wednesday, the BoE held the interest rate at 5.25 percent for a fifth consecutive time.
Marking a turn in the housing market, the BoE reported that the number of owner-occupied mortgage products was now back at levels recorded before the start of the interest rate tightening cycle.
The number of mortgage approvals for house purchases had also risen in January to its highest level since October 2022, the bank confirmed.
Unaffordable Rents
Around 19 percent of households in the UK are private renters. Ben Twomey, the director of the Generation Rent campaign, has called on the government to tackle the surge in private rent.“As inflation eases, the cost of renting crisis is continuing at pace. Nine percent rent rises in a year across all tenancies is well above average wage growth, showing just how badly we are protected from unaffordable rents. We need gov’t to urgently slam the brakes on soaring rents,” Mr. Twomey said on social media platform X.
Ben Beadle of the National Residential Landlords Association said on X that the best way to bring rents down is to increase supply and build new social homes.
According to the standard, which will be set following further consultation, tenants should be able to expect a “safe, warm, and decent” home.
However, a delay in the progress of the legislation to its next stage, has prompted criticism by National Residential Landlords Association, which called on MPs to push forward with the bill, ending the “uncertainty for landlords and tenants.”
