OFFICIAL: Rental property shortage raises rents at fastest rate in seven years

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UK private rental prices increased by 5.3% over the past year – up from 5.2% in the 12 months to June – recording their highest annual rate since 2016.

Rents for new tenancies were up by 5.2% in England, 6.5% in Wales, and 5.7% in Scotland in the year to July, according to the latest ONS data, which shows the highest annual percentage change was in the West Midlands, Yorkshire and the Humber, and London, at 5.5%, while the North East saw the lowest at 4.6%.

Prices in London (which account for almost a third of UK rental expenditure) experienced the highest annual percentage change since 2006, while private rental prices in Northern Ireland increased by 9.2% in the 12 months to May 2023.

The ONS explains that growth in the region has slowed since the peak of 10% in the 12 months to March, but that it remains higher than for other UK countries. 

Pressure

Nathan Emerson, Propertymark CEO (pictured), says the huge disparity in the number of properties available to rent compared to the continuously growing number of renters looking for a home, continues to put pressure on rent prices.

He adds: “UK governments need to urgently address the problem and look to adequately incentivise the provision of desperately needed homes rather than forcing landlords out of the private rented sector with unfair regulatory and financial hurdles.”

Extreme

Price increases in the lettings market are less extreme than last year, believes Gareth Atkins, lettings MD at Institutional PRS and Build to Rent, who says: “We’ve seen expected growth and are now into a more consistent busy market we normally see at this time of year.

“As such, the market will remain highly competitive through the summer. This July, as the seasonal rush began, there was an average of 21 renters registering per each new instruction in London.”

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