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Soaring Rental Prices Witnessed as Landlords Exit and Tenant Numbers Surge

The Office for National Statistics (ONS) has highlighted a surge in rental prices across England and Wales, attributing this increase to landlords exiting the market and a surge in tenant numbers. According to the ONS, rental prices are checked on average every 12 months in England and nine months in Wales. The findings reveal that 63% of English and 44% of Welsh properties have seen rent hikes since the last check, up from 10.5% and 8.4% respectively a year earlier.

Sarah Coles, Head of Personal Finance at Hargreaves Lansdown, shed light on the situation: “We’ve seen devastating rent rises, as more landlords sell up and tenants multiply. Since the last visit, almost two thirds of English landlords have hiked the rent and almost half of those in Wales have too. And those rises are eyewatering. Where rents have risen, they’re up an average of more than 11% in Wales and almost 10% in England. In England and Wales, one in five properties have seen rents rise 10% or more since the last visit, and in London this rises to one in four.

The report also indicated regional variations in the rental hikes. In England, London experienced the highest likelihood of rent increases at 77%, whereas the North West saw the least likelihood at 42%. Nevertheless, where rents did rise in the North West, the average increase was a substantial 12.3%.

Coles explained the complexities faced by both landlords and tenants: “The rental market is getting squeezed on all sides. Landlords are under rising pressure. They face tougher rules that mean they pay more tax on the way in, as they go along and then when they sell. More rights for renters means landlord costs are increasing, which means they make less money. Meanwhile, those who have borrowed to invest are facing rocketing mortgage costs when they come to refinance. Some of those who stay in the rental market are switching to short-term lets and Airbnb for a better yield.

She also highlighted the burgeoning demand for rental properties: “Tenants, meanwhile, are multiplying. The Royal Institution of Chartered Surveyors checks the number of people looking for rental property each month, and it has been rising relentlessly for months. A combination of more people renting later in life, more living alone, and an increased desire for self-contained space after the pandemic have all helped boost these numbers.”

The data underscores the current tensions in the rental market, with landlords facing financial pressures and tenants grappling with increasing rental costs.

The ONS has released experimental data on rental behaviour: Changes in private rental sector behaviour, England and Wales – Office for National Statistics