The heat is finally coming out of UK rental inflation which has slowed to 7.8%, down from 11% a year ago – the lowest rate for 2 years according to Zoopla’s latest Rental Report. The average UK rent is now £1,223 per month. The moderation in rental inflation is down to weakening demand and growing affordability pressures, rather than major expansion in supply.
Levels of new investment by private landlords remain low. The average letting agent has now 12 homes for rent – this is a fifth higher than last year but 28% below the pre-pandemic average. However, there remain more than 15 enquires for every home for rent – this is down from over 40 enquiries in 2021 but still double pre-pandemic levels.
The pandemic years have driven a step change in rents which have jumped 29% higher since January 2020. This has pushed many more rented homes into the higher rental brackets. Analysis of average rents by local authority reveals that over half of rented homes (51%) are now in markets with average rents of over £1,000 per month – almost double the level five years ago.
The supply/demand imbalance is narrowing but is far from closed. Rents will continue to rise over 2024, albeit at a slowing rate.
