As of October 2024, the UK’s average rent for new lets is £1,270 a month, according to Zoopla’s Quarterly Rental Market Report.
Rent rises since 2021 mean the typical cost is £270 more a month than three years ago. In comparison, earnings have grown by 19% in the same time.
In the past year rents have risen 3.9%, the slowest rate of growth in three years. Rental inflation ranges from a high of 10.5% in Northern Ireland to a low of 1.3% in London over the past 12 months.
Affordability
Zoopla researchers noted that the imbalance between supply and demand is narrowing, but will remain an ongoing characteristic of the rental market over 2025. It warned that affordability will be a growing constraint on rental inflation in areas with the highest rents.
Average UK rents are expected to rise by 4% in 2025, with large cities and London lagging while rents rise in more affordable areas.
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London has recorded the greatest slowdown over the past year, with average rents 1.3% higher over the past year, down from 8.7% a year ago. London also has the highest rents, averaging at £2,190 per month. Rents are rising the fastest in Northern Ireland (10.5%) and the North East (8.7%) – the two areas with the lowest average rents.
With more renters than there are homes to rent, people are seeking out the best value for money, Zoopla found. This means the impetus for rental inflation is generally being driven from markets with lower rental values. It also said there is evidence that, within cities, rents are typically rising faster at the lower end of the market.
In London, rents are 3 to 6% higher over the past year in lower-value areas of outer London, led by Havering (5.9%) and Barking & Dagenham (5.2%). Rental inflation is less than 1% in inner London areas, led by Kensington & Chelsea, Greenwich and Tower Hamlets.
Supply issues
Zoopla said that private landlords were continuing to sell off rented homes at a steady pace in the face of greater regulation and higher borrowing costs, despite what have been sizable increases in rents.
On the positive side, it said there has been more corporate investment in new build rented homes – but even in these instances, the pace of new development has slowed in the face of higher borrowing costs and more regulation.
Ben Twomey, chief executive of Generation Rent, said: “Everyone needs a safe, secure and affordable home. But renters across the UK are facing soaring rents which are far outstripping our earnings.
“The Government’s Renters’ Rights Bill is a good start in giving renters more protection from eviction, but there are very few measures in the bill to give us the breathing space we need from the cost of renting.”
Twomey added: “The Government must act urgently to slam the brakes on rising rents, whilst unfreezing the Local Housing Allowance rate will protect families on low incomes from poverty and homelessness.”