Rents in the UK increased to an average £903 during Q4 2022, according to figures from The Deposit Protection Service (DPS).
The latest quarterly Rent Index from the UK’s largest protector of deposits’ showed that average rents climbed by 1.6% (£14) from Q3 last year, and by 8.3% (£69) since the fourth quarter of 2021.
Average annual UK rent is now £1,332 higher than the same time two years ago – a figure that equates a rate of increase of £111 (14.02%) a month.
The latest data from The DPS also highlighted that increases in London and Scotland have outstripped the Consumer Prices Index (CPI) 9.2% annual rate of inflation, according to the Office for National Statistics (ONS).
Average rents in the capital increased by 11.6% (£160) from £1,381 to £1,541 between Q4 2021 and Q4 2022, while they rise by 12.02% (£79) from £657 to £736 during the same period in Scotland.
“The UK’s sustained rent rises are a result of a complex combination of inflationary pressures due to demand for housing,” commented managing director at The DPS, Matt Trevett.
“Higher interest rates may also be preventing those tenants who are looking to buy their own property from meeting mortgage affordability criteria, which means they must continue to stay in the private rental sector (PRS).
“Higher building material costs may also be affecting the pace and price of the construction of new homes, which is also squeezing the supply of properties for rent or purchase.”
Managing director at Zephyr Homeloans, Paul Fryers, added: “Whilst mortgage interest rates for buy-to-let properties have stabilised during the past few months, landlords must now meet stricter affordability tests.
“As a result, landlords are under pressure to increase rents to ensure they have sufficient funds. Landlords who want to exercise forbearance for their tenants during the present time may find themselves prioritising their mortgage-related obligations.”
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