The annual rate of rental growth for new lets climbed to 11% the in the first quarter of the year, according to Zoopla’s latest UK rental Market Report.

Figures showed the average monthly rent climbed to £995 from £897 a year ago.

Zoopla said the rate of rental growth has gained momentum across most markets in the last six months as post-pandemic demand surged back into city centre markets, and the supply of properties for rent struggled to keep pace. The rise in asking rents has been particularly acute in the flats market in London, the property expert stated.

According to the index, the sharp growth follows a period of moderate rental growth in most of the UK, however, with growth outside London sitting between 1% and 4% for much of the last decade. Cumulative UK rental growth since the start of 2016 now totals 16% and when compared to average wages and CPI inflation – with wage growth reaching 8.8% last year – average UK rents have failed to keep pace in that time.

“High levels of demand amid constrained supply is still putting upward pressure on rents, but affordability pressures will mean an easing in rental price growth through the rest of 2022,” commented Zoopla head of research, Gráinne Gilmore.

Senior personal finance analyst at Hargreaves Lansdown, Sarah Coles, added: “The property market isn’t actually defying gravity: the 11% hike in rents over the past 12 months has been the hidden string holding it up.

“Enormous pressure from runaway bills, rises in mortgage costs, and big drops in consumer confidence has historically meant house prices started to weaken. And while nobody is ruling it out eventually, for now they are riding high. Rising rents are the missing piece of the puzzle for those trying to understand how house prices are still rising so quickly.”

Coles added: “The pressure on rents shows no sign of abating. Landlords continue to sell up in order to capitalise on higher house prices, so there are fewer properties left for the growing number of tenants.”

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