Average UK rents during the final quarter of last year increased by 8.27% to £903 compared to £834 at the end of 2021, the latest Deposit Protection Service (DPS) data shows.
DPS reveals that all regions across the UK have seen annual rental growth, with London and Scotland recording double-digit percentage rises that outstrip inflation.
Average rent in London went up by £160 from the end of 2021 and now stands at £1,541, the highest rise by value seen by any region.
The highest rise as a percentage of average rent was seen in Scotland, where rents went up by £79 (12.02%) to £736, also the second highest regional rise by value after London.
Only three regions experienced annual growth under 6%.
Yorkshire saw the smallest percentage increase, up £32 to £614, closely followed by the South East up £53 to £1,014.
These percentage rises are still higher than the 5.30% increase in the UK national average rent seen in 2021, the previous high water mark.
Over the last two years, UK average rents have increased by £111 (14.02%) meaning tenants are now paying on average over £1,300 a year more on rent than this time two years ago.
At a time when more and more people are looking for rental accommodation, the DPS says net growth of available properties in the private rented sector (PRS) has “stagnated” during 2022.
DPS managing director Matt Trevett says: “The UK’s sustained rent rises are a result of a complex combination of inflationary pressures due to demand for housing.”
“Higher interest rates may also be preventing those tenants who are looking to buy their own property from meeting mortgage affordability criteria, which means they must continue to stay in the PRS.”
“Higher building material costs may also be affecting the pace and price of the construction of new homes, which is also squeezing the supply of properties for rent or purchase.”
Also commenting on the figures, Zephyr Homeloans managing director Paul Fryers notes: “Whilst mortgage interest rates for buy-to-let properties have stabilised during the past few months, landlords must now meet stricter affordability tests.”
“As a result, landlords are under pressure to increase rents to ensure they have sufficient funds.”
“Landlords who want to exercise forbearance for their tenants during the present time may find themselves prioritising their mortgage-related obligations.”
