Rent increases eat away mortgage interest

UK Rent Climbs by Record 9% Annually, Reaching £1,276 on Average Monthly

According to the Office for National Statistics (ONS), rental costs have surged across all regions of the UK. The average monthly rent in England has reached £1,276, marking a notable 9% annual increase—the highest recorded rise to date.

The trend of rising rents has been ongoing since the inception of the ONS data series. However, in recent months, this trajectory has accelerated significantly. Contributing factors include heightened interest expenses for landlords and a noticeable decline in the availability of rental properties, both of which have collectively propelled prices upwards.

In Zoopla’s latest rental market report, they have indicated that rental prices have surged by 29% on average since the onset of the pandemic, marking a significant shift in the rental landscape. This spike has propelled a considerable portion of rented properties into higher rental brackets. Recent analysis shows that more than half of rented homes (51%) are now situated in markets where the average monthly rent exceeds £1,000—an almost twofold increase compared to figures from five years ago.

Zoopla Rental Market Report

Investments, especially in the property market, require a long-term approach rather than seeking quick wins. Despite recent challenges such as news updates and tax changes impacting some landlords and prompting them to divest their investments, this shift can actually benefit those who remain in the market. The decrease in supply due to some landlords exiting the market has resulted in increased demand for rental properties. This heightened demand, coupled with reduced supply, has led to further increases in rental prices. As strong advocates of the private rental market and property investment, we recognize that navigating fluctuations is part of the investment journey, and strategic decisions can yield favourable outcomes in the long run.