The cost of renting privately in the United Kingdom has begun rising more quickly after three years of slower growth, according to BBC, warning tenants of further increases ahead.
Average rents for new tenancies were 2.6 percent higher in July than a year earlier, according to data from property website Zoopla. The firm forecasts that annual rent rises will reach 4 or 5 percent by the end of the year.
Fewer homes are available to rent, while higher mortgage rates have discouraged some first-time buyers from leaving the rental market, intensifying competition in certain areas, Zoopla said.
“Our latest report shows how sensitive the rental market is to even modest changes in how many homes are available for rent,” said Richard Donnell, executive director at Zoopla.
“Growing the number of homes for rent through increased investment is the most sustainable route to boosting choice for renters and ensuring stability in rent levels over the long run.”
The number of properties listed for rent was 3 percent lower than a year earlier, and each listing now attracts more than five enquiries on average — the highest level of competition in nearly two years. Demand was particularly strong in London.
Rent increases are occurring across the country, though the pace varies by location. In cheaper areas tenants can more easily absorb higher costs, while in expensive cities rents are already close to what many can afford, limiting further rises, the report noted.
New investment by landlords remains limited because of higher costs and increased regulation, Zoopla added.
Nathan Emerson, chief executive of lettings agents’ body Propertymark, said the findings highlighted the need for more high-quality rental housing.
“A sustainable private rented sector requires the right conditions for responsible landlords to invest for the long term,” he said.
“Increasing supply must remain a priority if we are to give tenants greater choice, improve affordability and create a more stable rental market.”
