The UK is witnessing a deceleration in rent inflation as average private rents rose by 8.9% in the year to April, a slight decrease from the record 9.2% increase observed in March, according to the Office for National Statistics (ONS).
This marks the first easing of the annual rent inflation rate since December 2023. However, despite this slowdown, rents remain significantly higher than they were last year.
Among the nations, England experienced the highest average rent increase at 8.9%, followed by Scotland at 10.0% and Wales at 8.2%. Northern Ireland, with data available up to February, reported a 10.4% increase.
Pressure on Renters Persists
Nathan Emerson, CEO of Propertymark, commented on the ongoing challenges: “Many people continue to grapple with what has been a very challenging few years financially, and the pressure remains for some renters.”
Emerson highlighted several factors contributing to rising rents, including elevated interest rates and potential legislative changes, which are driving many landlords out of the market. “We need to see a much greater focus on ensuring the supply of homes meets current demand levels,” he added.
London Renters Face Steepest Hikes
Within England, regional disparities persist, with London’s renters facing the steepest increases at 10.8%, while those in the North East saw a more modest rise of 5.8%. The data also indicates a significant variance in rent prices based on property size and location. Detached homes command the highest average rent at £1,453, while flats and maisonettes are more affordable at £1,219. Properties with four or more bedrooms are the most expensive, averaging £1,920, compared to £1,002 for one-bedroom flats.
‘Stuck in Rental Hell’
Sarah Coles, head of personal finance at Hargreaves Lansdown, described the current rental market as “rental hell,” noting that rents are up 8.9% over the year. She remarked that while this is a slight relief from March’s record high, the situation remains dire. The rise in new tenants each month since the market reopened post-lockdown, coupled with the unaffordability of home buying, means more people are renting for longer. Additionally, the growing number of single-person households is increasing rental demand.
UK House Prices Show Signs of Recovery
Meanwhile, the ONS reports that UK house prices are beginning to recover after a period of decline, with a provisional annual inflation rate of 1.8% for the 12 months to March 2024. This is a marked improvement from the negative 0.2% seen in February 2024. The average UK house price in March was £283,000, up £5,000 from the previous year. All regions except London, where prices declined by 3.4%, showed growth, with Yorkshire and the Humber experiencing the highest annual increase at 5.0%.