Credit, Collections & Insolvency News
Latest Office of National Statistics (ONS) data has shown that private rentals have continued to rise at a faster rate than inflation, with tenants seeing housing costs rises by 9.2% in the 12 months to March 2024. This is an increase on the 9% annual increase recorded the previous month.
The figures show that the biggest rent increases were in Scotland. Overall the average monthly rent paid in England now stands at £1,285, a 9.1% increase. In Wales the average rent is £727, a 9% increase while in Scotland the average rent is £947 — a 10.5% increase. In Northern Ireland average rents increased by 10.1 per cent in the 12 months to January 2024.
Further regional breakdowns show that in England rent increases were highest in London at 11.2% over the past 12 months. The North East had the lowest average increase at 6.1%.
Properties in Kensington and Chelsea in London had the highest average monthly rents, at £3,305. The lowest average rents were in Dumfries and Galloway in Scotland, where tenants paid an monthly average of just £475.
Sarah Coles, Head of Personal Finance at Hargreaves Lansdown said “There’s no let-up in the squeeze on renters, as rents were up 9.2% in a year – a record since the data was first collected in 2015. It’s easy to see why from RICS figures. The number of new tenants has risen every single month since the market reopened after lockdown. Meanwhile, the number of landlords has been falling relentlessly since summer 2022, and has only briefly been in positive territory for a handful of months since 2017.
“Rising house prices and higher mortgage rates, coupled with tougher taxes and more stringent rules around letting property, means the numbers have stopped adding up for huge numbers of landlords, who have been gradually selling up and getting out of the business. The more stringent rules are designed to protect renters, and the higher taxes to ensure landlords don’t snaffle all the properties that first-time buyers want to move into. However, in the process, they’re persuading landlords to give up the ghost, which is putting immense stress on renters, who are facing a battle to find a property, and ever-increasing rents when they do.
“The HL Savings & Resilience Barometer shows that sky-high rents are taking a horrible toll. Private rents tend to be similar to mortgage payments, but households that rent earn far less than those who own. It means their housing costs swallow a much bigger slice of their income. As a result, they have around £193 left at the end of the month, and fewer than half have enough emergency savings. They’re also falling worryingly short when it comes to saving for the future. Only 18% are on track for a moderate retirement income, compared to 55% of those who own with a mortgage.”
