UK rents rise at the slowest pace since 2021 as demand eases
TENANTS in the United Kingdom got a small respite from spiralling rents in April, with competition for properties slipping from the fiercest levels in years, according to property portal Zoopla.
Annual inflation for new lets eased to 6.6 per cent, the lowest growth since October 2021 and compared to 10 per cent a year ago, Zoopla said. Some of this was due to the cost of mortgages ticking lower, enticing more renters into buying properties and in turn lowering demand for tenancies.
Still, the UK’s supply of homes available for new renters is one-third below pre-pandemic levels.
Zoopla reported 15 enquiries per rented home over the four weeks to May 28, more than double the pre-pandemic level of six people competing for every property.
Affordability also remains an issue. The average monthly UK rent in April was £1,226 (S$2,110), up £80 over the last year. In London, that figure has risen to £2,122, meaning average renters can expect to spend 41 per cent of their gross earnings on rent, Zoopla said.
Rents for new lets have been rising faster than average earnings for over two and a half years, and the proportion of gross earnings spent on rent is at the highest level for a decade across all UK regions and countries, the research found.
“Rental growth has calmed down since the pandemic but it’s still high by historical standards,” said Tom Bill, head of UK residential research at Knight Frank. “Average rents are 22 per cent higher than they were before the pandemic and the figure is even higher in many areas.”
The UK’s shortage of homes to let is barely budging, with the overall stock of private rented homes broadly flat since 2016, Zoopla said. Some landlords were pushed out of the market in the past few years by interest rate rises and a tax clampdown on buy-to-let borrowing.
The lack of affordable housing has become a battleground between the ruling Conservative Party and the opposition Labour Party ahead of the general election on Jul 4.
“Growing the supply of rented homes, both private and affordable, should be among the top housing priorities for the next government,” said Richard Donnell, executive director at Zoopla.
Rental growth is set to slow to 5 per cent in 2024, according to Zoopla – yet the firm said this is driven by tenants struggling to afford rents at current prices, rather than any expansion in supply. BLOOMBERG
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