Private home rents in Great Britain have increased to their highest point on record after shortages in supply and mortgage rate rises combined to push the cost up by 10% over the past 12 months.
The average rent for new properties being put on the market now stands at a record £1,278 per calendar month outside London in the July to September period, according to Rightmove.
The property website found an even bleaker picture for prospective tenants in the capital, where the average advertised rent also hit a new high in the past quarter – £2,627 a month – a 12.1% increase on the same time last year.
It said an overall shortage of available rental properties was driving up prices. The average rental property across Great Britain is now receiving 25 inquiries from prospective tenants to letting agents, three times more than agents were receiving in pre-pandemic 2019.
Luton, 30 miles north of London, had the country’s hottest rental market over the past 12 months, with rental prices rising by a staggering 23.6%, or £200 a month.
Rightmove said that over the past 12 months the rents asked by agents have risen by more than 20% in Loughborough, Edinburgh, Paisley, Preston and Staines. A host of other towns recorded increases in the 10%-20% range.
Ria Laitmer, a lettings manager at Clarkes in Dorset, described the rental market as “crazy”.
“We’re receiving mounting inquiries for each property to rent from would-be tenants, with queues of tenants arriving to open-house viewings and the majority being left disappointed as there are just not enough properties on the market to meet the demand,” she said.
Rental increases are also thought to have been exacerbated by landlords with buy-to-let mortgages trying to pass on sharp increases in their costs caused by higher interest rates. Landlords have also been selling up in the face of higher costs.
Although mortgage rates have been falling in recent weeks, on Wednesday Rightmove separately published data showing the average five-year fixed mortgage rate is now 5.50%, up from 5.32% a year ago. The average two-year fixed mortgage rate is now 6.01%, up from 5.70% a year ago, it said.
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Rightmove’s director, Tim Bannister, said: “Record rents and far more tenants looking to move than there are homes available means it will still feel very difficult for many tenants navigating the market.
“However, there are signs that some of the pressure between supply and demand is beginning to ease, with the number of new rental properties coming to the market now at its highest level since the end of last year.
“While it is likely that there is some way to go before this filters through to rental prices, if the improving trend between supply and demand continues, we could start to see the pace of yearly rent rises slow more significantly than it has been.”
