According to a real estate website, rent increases have slowed to their lowest level in 30 months, but competition for housing remains fierce.
Annual rental price inflation for new rental properties was 6.6 percent in April, with the average rent increasing by £80 per month compared to the previous year, Zoopla said.
The 6.6% increase was the lowest annual rent inflation rate since October 2021 and indicates a further slowdown in the overall rent inflation rate later in 2024, the report added.
Even though demand for rental apartments has decreased over the past year, there are still 15 people crammed into each rental apartment, more than double the number before the pandemic, when an average of six people lived there.
Leading the slowdown is London, with annual rental price growth of 3.7%, Zoopla’s report adds.
The average rent in London is £2,122, well above the UK average of £1,226.
Zoopla predicts that rental price growth in the market will slow to 5% in 2024.
The reasons for this are changes in demand and affordability rather than an expansion of supply, it said.
The report states: “Looking ahead, we do not believe that the imbalance between rental supply and demand will improve significantly over the next twelve months.”
“New investment in the private rental sector remains low, while demand is expected to remain above average. This means that rents will continue to rise at a slower pace.”
Richard Donnell, managing director of Zoopla, said: “Rental cost increases have slowed to a 30-month low.
“Rents continue to rise faster than average incomes, although the gap is much smaller than it was a year ago. Rental demand continues to far exceed available supply, maintaining upward pressure on rents, but there are some areas where rental growth has stalled.”
He added: “Increasing the supply of private and affordable rental housing should be one of the next government’s top housing priorities.”
“A healthy private rental sector is essential for economic growth and a more balanced housing market. More supply is the quickest way to reduce pressure on tenants and improve the overall quality of rental housing.”
Nathan Emerson, chief executive of property association Propertymark, said: “Our affiliated agents have been telling us for years about a growing discrepancy between the number of privately rented homes on the market and the increasing demand from tenants.”
Adam Jennings, head of lettings at London-based property firm Chestertons, said: “The recent increase in the number of available properties has created a slightly better environment for tenants looking to move.”
“We have seen a temporary slowdown in rent increases, but expect more tenants to start looking in the summer months.”
Here are the average rents per month in April and the annual increase according to Zoopla:
East Midlands, £862, 7.3%
East of England: £1,173, 8.2%
London, £2,122, 3.7%
North East, £704, 9.5%
North West, £855, 8.4%
Northern Ireland, £747, 2.9%
Scotland, £797, 9.3%
South East, £1,321, 7.9%
South West, £1,072, 7.8%
Wales, £872, 7.8%
West Midlands, £909, 7.8%
Yorkshire and Humber, £800, 7.0%
