UK tenants saw the highest year-on-year increase in private rent prices since records began in the 12 months between February 2022 and 2023, according to the latest data released by the Office for National Statistics (ONS).
The February 2023 edition of the Index of Private Housing Rental Prices showed that private renters across the UK saw an average increase of 4.7% over the past year – 4.6% in London, where rents are already highest, and 4.8% in the UK excluding London.
This is the largest UK-wide year-on-year increase since the ONS began indexing rental increases for the whole country. The same is true since records began for England in 2006, Wales in 2010 and Scotland in 2012. Northern Ireland has seen higher growth, last measured at 9.2% in November 2022, but measurement has not been possible since then.
This reflects what Propertymark, the professional association for estate and letting agents, calls an “out of balance” lettings market in its latest report, with an average of ten registered applicants per rental property.
Why are private rent prices increasing?
As rising inflation, the cost of living and interest rates bite, landlords – particularly buy-to-let ones – pass their costs onto their tenants. This can also lead to increased general market rates and the opportunity to charge increased rents on homes that are already owned outright.
Shortages of available rental properties are also exacerbating the issue, with many landlords – particularly in London – selling up and leaving the property market or reducing their stake.
According to the ACORN renters’ union, under-regulation is at the heart of the issue.
ACORN policy officer Anny Cullum told City Monitor: “Rent rises are not naturally occurring phenomena, but the direct result of policy choices by successive governments who have encouraged the growth of an under-regulated private rented sector.
“As businesspeople, landlords will naturally use opportunities to try to increase their profit margins – this is why the market cannot be left to regulate itself.”
[Read more: How private renting has grown in England and Wales over the past decade]