The property portal is not the only expert warning of surging rents. Rival site Rightmove found rents are rising at the fastest rate on record and are up 11 per cent year-on-year to a record £1,088 per month outside London.
But not all areas have experienced equal rent rises.
The pandemic changed working practices and saw people leaving London and that fall in demand saw rental growth fall 10 per cent last year. As students, office workers and international demand has returned to the capital with a decline in Covid-19 measures, average annual growth rose to 15 per cent in the first three months of 2022.
That means the average renter in London will pay £20,000 in rent in a year with a single earner paying more than half their earnings in rent. In the UK as a whole, the average rent accounts for over a third of gross income for a single earner.
Elsewhere rural areas like Great Yarmouth in the east of England, South Somerset in the south west and north-east Lincolnshire have seen more modest rises with rents that amount to 15 per cent of a single earner’s income, Zoopla said.
Scotland, too, has seen annual rises of around six per cent, much lower than Wales which has experienced an 11 per cent surge in the last year. But both countries have seen demand levels 65 per cent higher than the five-year average.
It’s a similar story from the Office for National Statistics’ annual private rental market summary.
Between April 2021 and March 2022, the median rent hit its highest point on record at £795 a month but there was great regional variation.
Unsurprisingly, London had the highest median monthly rent at £1,450 a month – almost £500 higher than any other region – with the median rent in Kensington and Chelsea reaching as high as £2,199.
The lowest median monthly rent could be found in Kingston upon Hull, Middlesbrough and Burnley at £450 with the North East lowest region overall with a median of £505.
It’s not just the private rental sector that has seen rent rises, tenants in social housing have also seen their rents rise by 4.1 per cent as of April 2022.
Why is UK rent so high?
The short answer to why rent is so high is because there is a shortage of affordable housing.
There is a housing crisis in the UK because not enough homes have been built by successive governments in the last few decades at a time where social housing stock has been sold off to the private sector through Right to Buy or demolished and not replaced.
An estimate from the National Housing Federation and Crisis found around 340,000 new homes should be supplied in England each year with 145,000 them to be affordable.
The Conservative government has previously targeted 300,000 new homes in England – a 2019 manifesto commitment – but is yet to hit that mark. In 2020/21, 216,000 new homes were supplied, down from 243,000 in 2019/20 largely down to the impact of Covid.
Meanwhile areas like Cornwall where tourism has seen a surge in short-term lets through the rise of Airbnb in recent years faces even more pressures on demand.
The private rental sector has picked up the slack in the meantime. While the number of people relying on the sector for a home fell in England between 2016 and 2019, the sector has grown again since the pandemic hit.
“UK rental growth is being driven by high rental demand and limited supply, trends that are more pronounced in city centres,” said Gráinne Gilmore, head of research at Zoopla.
The rising rents mean tenants are staying put rather than moving to a property where they would pay more rent. Zoopla found tenants are staying in rental properties for an extra five months in 2022 compared to five years ago.
It’s a phenomenon that Rightmove has also recognised. Tim Bannister, Rightmove’s director of property data, said: “A shortage of rental homes and strong demand for the properties available has led to a greater number of tenants choosing to renew their leases and stay put, rather than re-enter a competitive rental market.
“People who had been waiting to see what happened last year are now being faced with record rents and so are seeking out properties where they can have more certainty over their outgoings, with all bills included becoming increasingly sought after.”
Will rent prices go down in 2022?
Experts predict rents will continue to rise in 2022, albeit at a slower pace as the cost of living crisis continues to hit household incomes.
But the localised element of the market means areas where demand is at its highest could see the record rises experienced in recent times continue.
“The surge of post-pandemic pent-up rental demand will normalise through Q2 and Q3 however, which means rental growth levels will start to ease,” said Zoopla’s Gilmore.
“Affordability considerations will also start to put a limit on further rental growth although this may occur at different times depending on location. Rents are likely to continue rising for longer in areas which have the most constrained stock levels – currently London, Scotland and the South West.”
Rightmove’s Bannister agreed that the cost of living crisis is likely to put the brakes on rents rising for long-term tenants.
He added: “Landlords may have been tempted to put their rents up given the high demand from new tenants, but many understand the affordability challenges of rising rents and bills, as our study shows that the majority are charging their tenants the same as a year ago.”
