The UK’s private rental market remains a challenging landscape for tenants, with demand continuing to outstrip supply despite signs of slowing rent growth, according to new figures and industry experts.
Fresh data from the Office for National Statistics shows that rents for new listings rose by 5.9% in the year to July, bringing the average tenancy to £1,343 a month. The rate of increase has eased from 6.7% in June, but affordability pressures remain high.
Regionally, tenants in England saw average rents climb to £1,398 (up 6.0%), while in Wales rents surged 7.9% to £807. Scotland recorded a more modest rise of 3.6%, taking the average monthly rent to £999.
‘Structural Gap’ in Supply
Alex Upton, Managing Director at Hampshire Trust Bank, warned that the imbalance between supply and demand shows no sign of easing.
“We are still significantly short of the rental stock needed to meet demand, and that structural gap will keep upward pressure on rents for the foreseeable future,” he said.
Richard Donnell, Executive Director at property portal Zoopla, noted that cooling rent rises are partly due to more first-time buyers accessing mortgages, which eases competition in the rental market. Lower levels of migration have also played a role.
“Rental growth is slowing and set to move lower over the rest of the year as affordability acts as a growing brake,” he added.
Legislation on the Horizon
Attention is also turning to forthcoming legislation. The UK and Scottish governments are moving closer to passing the Renters’ Rights Bill and Housing (Scotland) Bill, both designed to boost tenant protections.
Nathan Emerson, Chief Executive of trade body Propertymark, said the scale of competition for properties highlights the urgency of investment in the sector.
“On average, across the UK there are typically six people making an application for every rental property available,” he said. “This represents an extremely unhealthy situation where long-term investment is urgently needed to keep pace with growing demand across nearly all regions.”