UK private rents surged by 8.4% in the year to August, nearly quadrupling inflation, with London experiencing the highest rise, according to ONS data.
Average private rents in Great Britain reached £1,286 per month in August, up by £100 compared to the same time last year. This marks an 8.4% increase, significantly outpacing the 2.2% inflation rate recorded for the same period.
This surge in rental prices highlights the growing pressure on tenants across the country, with London leading the way in terms of rent increases.
According to the Office for National Statistics (ONS), this rental growth represents one of the sharpest rises seen in recent years, reflecting a growing affordability challenge for renters.
The average rent in England rose to £1,327 in the year to August 2024, marking an 8.5% increase. In Wales, rents climbed to £752, also up by 8.5%, while Scotland saw a 7.6% rise, bringing the average rent to £969.
In Northern Ireland, rents experienced a 9.9% increase in the 12 months to June 2024. Within England, London recorded the highest rent inflation at 9.6%, while the South West had the lowest at 6.4%. These figures highlight regional variations in rent growth across the UK.
The average rent in London surged to £2,129, making it the highest in the UK, while the North East recorded the lowest average rent at £682. This significant disparity highlights the ongoing regional differences in the rental market, with London continuing to lead the way in rental costs compared to other parts of the country.
Aimee North, the ONS head of housing market indices, commented that although rental prices are still climbing at a near-record rate, there has been a slight slowdown in the pace of the increase. She pointed out that London once again saw the fastest growth in rents, while the South West experienced the slowest rise, reflecting the regional variations in the housing market. Despite the slowdown, the sustained increase in rents continues to put pressure on tenants across the country.
In other regions, rental growth has also been significant, but not to the extent seen in London. The disparity between regions is likely to continue as housing demand in metropolitan areas remains high, pushing rental prices upward. As more people move to urban centres for work and education, this demand-supply imbalance is exacerbating rental increases.
Nathan Emerson, CEO of Propertymark, an organisation representing estate agents, highlighted the challenges facing landlords in the current market. He explained that many landlords are contending with rising overheads, including inflation, interest rates, and maintenance costs, as well as uncertainty over future legislation. This combination of factors has created a tough environment for landlords, which in turn impacts rental prices.
Emerson also pointed out that landlords are facing a more complex taxation structure than in previous years, making it increasingly difficult to operate profitably. This, coupled with high inflation and increased costs, has led to higher rents as landlords attempt to cover their expenses. The uncertainty surrounding future regulations adds further pressure, leaving both landlords and tenants navigating an increasingly challenging rental market.
Rising costs and increased regulation have impacted landlords’ ability to stay in the rental market, with some choosing to sell their properties and exit the sector altogether. These pressures, including higher inflation and stricter legislation, are making it difficult for many to maintain profitability.
In August 2024, the highest average rent in the UK was found in Kensington and Chelsea, London, where tenants were paying £3,418. On the other end of the spectrum, Dumfries and Galloway in Scotland recorded the lowest average rent at £483. Outside London, Elmbridge in the South East saw the highest rent at £1,822.
Meanwhile, UK house prices have continued to rise, with an increase of 2.2% over the year, bringing the average price to £290,000. This marks a slight decrease from the 2.7% annual growth recorded in the 12 months to June 2024 but still represents the fifth consecutive month of rising house prices.
Although house price inflation has slowed compared to previous months, the housing market remains resilient. The continued rise in both rental and house prices is creating challenges for buyers and renters alike, as affordability remains a significant concern.
With both rents and house prices climbing, the outlook for the housing market suggests that affordability issues could persist, especially as the economic environment continues to evolve.
According to the Office for National Statistics (ONS), average house prices in England rose to £306,000, marking a 1.6% increase over the past year. In Wales, prices saw a 2% rise to £218,000, while in Scotland, the increase was more significant, with prices up 6% to £199,000.
The North East of England recorded the highest house price inflation in the 12 months to July 2024, with a 3.8% rise. In contrast, London was the only region to experience a fall in house prices over the same period.
Nick Leeming, chairman of Jackson-Stops estate agency, highlighted the impact of Labour’s election victory and a recent interest rate cut on the housing market. “For the first time, house prices are reflecting a cautiously positive afterglow from Labour’s election victory, showing a promising start for Autumn. The rate cut has helped steady mortgage rates and renewed buyer confidence, supporting stronger price growth.”
Leeming also emphasised that while buyers’ confidence is influenced by broader economic conditions, the new government must focus on addressing the supply and demand imbalance. He added that the market requires consistency and careful policymaking, rather than short-term or reactionary measures.
Download NOW
4 Simple Steps To Becoming Wealthy Through Property