Current chaos in the UK rental market shows no sign of resolving itself, with rents in fourth quarter of 2022 reaching an all-time high, according to the flat share website SpareRoom.
As housing supply continues to dwindle, there is ‘little sign of things changing anytime soon’, it said.
UK rents increased by 13 per cent between the fourth quarters of 2021 and 2022, SpareRoom reported.
This put average rent for a room in Greater London up to over £900 per month and was the biggest increase in room rent across all UK regions. Scotland was the only region to experience a decrease. Rents there went down by 6 per cent.
Overall demand for properties was at an all-time high in late summer/early autumn, but supply was at a 9 year low, said SpareRoom. ‘To put this into context – there were 245,351 renters searching and only 34,085 rooms available. Although demand dropped in the lead up to Christmas, the number of rooms also decreased over 2022. This, combined with cost-of-living increases, mean things are incredibly tough for renters right now’.
And a factor driving this is landlords’ continuing loss of confidence in the rental market. A recent SpareRoom poll suggested that the next 12-months will see a further decline in supply, with 41 per cent of landlords/agents either looking to reduce their portfolio in 2023 or exit the rental market altogether.
‘Although demand has eased since the record peaks we saw in August and September, the combined effect of low supply and the cost-of-living crisis means rents have continued to rise’, said SpareRoom director Matt Hutchinson.
‘The last 12 months has seen rents across the UK hit record highs and, unless new supply comes into market over the coming months, it’s hard to see those rents come down meaningfully in 2023.
“High rents not only make it difficult for tenants who need to move now, it also means that many stay put to avoid paying more rent. Unless people are able to move freely, the impact on the economy could be significant. Work is the key reason people move, but if a potential pay rise is wiped out by having to pay more rent, lots of people will simply stay where they are’.
