UK rents increased by 6.2% in the year to December 2023, unchanged from the previous month’s figures but still the joint highest annual percentage change since 2016.
The ONS Index of Private Housing Rental Prices shows a rise of 6.1% in England, 7.1% in Wales and 6.3% in Scotland – up from 6.2% and the highest annual rate in the country since 2012. London saw the highest annual percentage change at 6.8%, down slightly from the record-high increase of 6.9% in the 12 months to November, while the North East experienced the lowest rise at 4.6%.
The ONS explains that its figures are lower than Zoopla’s and Rightmove’s because it bases estimates on a mixture of newly let properties and existing lets rather than just new lets. Figures from CityLets, for example, cite year-on-year growth for average rents in Scotland (new tenancies) at 12.9% - a double digit rise for the fifth time in a row since the introduction of the Cost of Living Act.
Jeremy Leaf, north London estate agent and a former RICS residential chairman, says shortage of stock, partly caused by landlords leaving the sector in response to worries over the tax and regulatory regime, partnered with seemingly unstoppable demand are to blame for the overall rise across the UK.
However, he adds: “In the early weeks of 2024, we have noticed an increase in supply which has helped to keep a lid on some of the more ambitious rents and the gap with demand is narrowing.”
London agent Chestertons reports that there are now more rental properties for tenants to choose from than any other time since Covid. It is marketing about 45% more properties to rent compared with last year, partly due to many three-year tenancies agreed by tenants at lower-than-average rates during the pandemic coming to an end. In December, it saw 46% more of its landlords agreeing to a rent reduction compared with the year before.