Rent rises mapped with costs up £3,240 - is your area affected?

Rented homes are typically £3,240 per year more expensive since the end of the the pandemic, according to online property search group Zoopla.

Renters now face an average annual cost of £15,240, a rise of around £270 per month

Zoopla says the pace of rent increases is slowing everywhere except Northern Ireland where they are rising from a low base.

London has recorded the greatest slowdown, with average rents 1.3 per cent higher over the last year, down from 8.7 per cent a year ago. The capital also has the highest rents, averaging £2,190 per month, 70 per cent higher than the UK average.

Outside of London, rents are rising fastest in areas outside major cities such as Rochdale (11.9 per cent), Blackburn (10 per cent), Birkenhead (9 per cent) Burnley (8.9 per cent), reflecting what Zoopla calls ‘catch-up’ rental growth as renters seek out areas with better value for money in and around major cities. 

Rents are rising fastest in Northern Ireland (10.5 per cent) and the North East (8.7 per cent), the two areas with the lowest average rents of £801 and £732 per month, respectively. 

In Nottingham, it found rental growth had stalled as a result of an increased supply of homes available to rent over the last year, providing renters with more choice. Rents in the city are unchanged over last year.

The east Midlands city is not typical and while the number of homes available to rent currently stands 12 per cent higher than this time last year, Zoopla found the number of homes for rent remains below pre-pandemic levels in all regions apart from the East Midlands. 

Despite the rent rises private landlords continue to sell off rented homes due to greater regulation and higher borrowing costs.

Zoopla believes the peak of the private landlord sell-off has now passed. “It’s now a question of when market conditions look right for landlords to increase investment and expand rental supply. This is still some way off and requires lower base rates and higher rental yields,” the report said.

It forecasts average rents for new lets to increase by four per cent over 2025 taking the annual rental cost to £15,850. The continued mismatch between supply and demand means Rental growth in London and larger cities will lag behind the UK average as a result of growing affordability pressures and further modest growth in supply. 

Richard Donnell, Executive Director at Zoopla said: “Private renters moving home have faced rents rising faster than earnings over the last three years.

“The number of rented homes hasn’t grown since 2016 creating scarcity for renters at a time when demand has boomed on a strong labour market and the rising cost of home ownership. Rental growth has slowed but we expect an ongoing lack of rental supply to keep an upward pressure on rents.

“The ambitions to expand home building are important as the quickest way to ease the pressure on renters is to boost the supply of private and social rented homes. Private landlords will continue to play an important role and should be encouraged to remain in the market.”

Demand for rented property began to takeoff in 2021, as lockdowns were lifted and people looked to move house, but were confronted with limited choices. The annual cost of renting has grown 27 per cent, significantly outstripping wages over the same period.

Zoopla said the rate of rent rises has now hit a three-year low, with tenants struggling to afford what is out there on the market and often looking to move to cheaper areas as a result.

The Renters’ Reform Coalition (RRC), representing renters and housing organisations, called on the government to strengthen the forthcoming Renters’ Rights Bill to provide renters more protection against rent hikes with a cap on rent increases and a commission to explore longer term solutions to make renting more affordable.

Lucy Tiller, at the RRC, said: “Everybody needs a secure home, but every week shocking rent hikes such as these are forcing families out of their homes and communities. The forthcoming Renters’ Rights Bill is welcome, but it won’t address this crisis – the Government should commit to a National Rental Affordability Commission, to find ways to put the brakes on soaring rents, a cap on rent increases within tenancies, to help tenants stay in their homes.”