Rent rises are easing across the UK official data has revealed but experts warn that the private rental market continues to suffer from a significant imbalance between supply and demand.
The Government’s Official for National Statistics says rents for new listings increased on average by 5.9% to £1,343 per tenancy during the 12 months to July, down from 6.7% in June, far higher than inflation.
The regional picture includes average rents increasing to £1,398 (6.0%) in England, £807 (7.9%) in Wales, and £999 (3.6%) in Scotland.
In England, private rents annual inflation was highest in the North East (8.9%) and lowest in Yorkshire and The Humber (3.5%).
Richard Donnell (pictured), Executive Director at Zoopla, says this easing of rent increases is down to improved access to mortgages helping first time buyers buy homes and easing the demand for rented homes alongside lower levels of migration.
“Rental growth is slowing and set to move lower over the rest of the year as affordability acts as a growing brake on rental growth,” he says.
Alex Upton (pictured), MD of specialist mortgage lender Hampshire Trust Bank, says: “Rents are still edging upwards, but there are signs that tenant demand has eased slightly over the summer.
"Propertymark’s latest Housing Insight report shows new tenant registrations in June fell to their lowest level in years, and the supply-demand imbalance has softened.
"There are now six applicants per property on average, compared to nearly ten at points last year.
“Even so, a modest slowdown doesn’t change the underlying picture. We are still significantly short of the rental stock needed to meet demand, and that structural gap will keep upward pressure on rents for the foreseeable future.”
Nathan Emerson (pictured), CEO of Propertymark, says: “With the UK Government and the Scottish Government edging towards the final stages of legislating the Renters’ Rights Bill and the Housing (Scotland) Bill respectively, the rental market is about to undergo fundamental changes aimed at strengthening consumer protection.
“We currently stand at a point where, on average, across the UK there are typically six people making an application for every rental property available.
"This represents an extremely unhealthy situation where long-term investment is urgently needed to keep pace with growing demand across nearly all regions.”
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