The average asking rent outside London stands at £1,172, up almost 10% in a year… while those in the capital have to pay almost 16% more for a property
- Demand to supply remains high despite an increase in the number of properties for rent
- Rightmove expects rents to rise another 5% in 2023
The average asking rent outside London has hit a record £1,172 per month, according to data from Rightmove, which equates to a 9.7% increase on 2022.
He said there were still more tenants looking for accommodation than properties available, even though the number of rental units increased by 13% during the year.
Rightmove predicts that rents will rise another 5% in 2023 unless there is a “significant addition of housing available for rent”.
He said the number of people inquiring about a rental property had increased by 7% compared to the previous year and by 53% compared to the pre-pandemic period in 2019.
But the increase in the number of available homes has caused the overall competition between potential tenants for properties to drop by 6% compared to January 2022, and by a third (33%) compared to the peak in September.
Rightmove’s Director of Property Sciences, Tim Bannister, said: ‘Although the fierce competition between tenants to find a home is starting to ease, it is still double the level of 2019.
“Letting agents see extremely high volumes of tenant inquiries and deal with dozens of potential tenants for each available property.
“Landlords will need to balance any rent increase with what tenants can afford to pay in their area, to continue to find tenants quickly and avoid any periods when their unit is empty because tenants are unable to pay the rent. asking rent.
“We expect the annual growth rate to decline to around 5% by the end of the year nationwide, although this would still significantly exceed the 2% average we have seen in the five years preceding the pandemic.”
In London, average asking rents accelerated in the last three months of the year, increasing by 5.8%. This took average asking rents for new tenants to a new record high of £2,480 per month.
This is an increase of 15.7% over the previous year.
Asking rents increased every quarter last year, but have slowed in the past three months
Higher rents could mean additional hardship for those who are already struggling to cope with the rising cost of living.
According to the Joseph Rowntree Foundation’s UK Poverty Report 2023, more than half of poor private tenants (51%) are pushed into poverty by their housing costs.
He said almost a third (29 per cent) of people experiencing poverty now live in the private rental sector, up from 17 per cent in 1994-95.
Compared to 25 years ago, the UK’s private rental sector is now home to three times as many families with children, rising from less than a tenth to just over a fifth of such families, it said. he declares.
Rising rents have also hurt potential first-time buyers, who are unable to put money aside as security because more of their income is spent on housing.
The number of first time buyers fell by 9% last year, while the average price they paid for a house rose, new figures from the Yorkshire Building Society reveal.
Across Britain, the average return – or financial return – to homeowners in the last three months of 2022 was 5.7%, an increase of 0.3% on the previous year.
Homeowners in the northeast of the country saw the highest returns, averaging 7.9%, while those in London saw the lowest returns, at 5.1%.
What to do if you need a mortgage
Borrowers who need to find a mortgage because their current fixed rate contract is coming to an end or because they have agreed to buy a home should explore their options as soon as possible.
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What if I need to remortgage?
Borrowers should compare rates and speak to a mortgage broker and be prepared to act to get a rate.
Anyone with a fixed-rate deal ending in the next six to nine months should consider how much it would cost them to remortgage now — and consider entering into a new deal.
Most mortgage transactions allow fees to be added to the loan and they are then only charged at the time of subscription. By doing so, borrowers can secure a rate without paying costly arrangement fees.
What if I buy a house?
Those who have agreed to buy a home should also aim to get quotes as soon as possible, so they know exactly what their monthly payments will be.
Homebuyers should be wary of overstretching and prepare for the possibility of home prices falling from their current high levels, due to higher mortgage rates limiting people’s ability to borrow.
How to Compare Mortgage Costs
The best way to compare mortgage costs and find the right deal for you is to talk to a good broker.
You can use our best mortgage rate calculator to view offers that match your home’s value, mortgage size, term, and fixed rate needs.
Be aware that rates can change quickly, however, and so the advice is that if you need a mortgage, compare rates and then speak to a broker as soon as possible, so they can help you find the loan mortgage that’s right for you.
> Check out the best fixed rate mortgages you could apply for