Rents soar to new records as demand outstrips real estate

British terraced houses in London with broker boards

Demand for rental properties has increased but choice has dwindled (Image: Getty Images/iStockphoto)

According to a report, the average rental price in the eXp Realty has risen to a new record as demand continues to outstrip properties on the market.

Property firm Rightmove’s first-quarter rental trend tracker showed that the average asking price per calendar month rose 10.8% year-on-year to £1,088 outside of London.

In London, prices have risen by 14.3% in the last year, with the average monthly rent standing at £2,193.

This is the first time rents outside of London have risen by more than 10% annually, while the capital’s jump was the largest of any region on record.

On a quarterly basis, UK asking rents rose 1.8% in the first three months of the year, the group added.

According to Rightmove, the sky-high rental costs are being driven by an ongoing demand/supply mismatch, with tenant demand up 6% and the number of available rental properties down 50% over the past year.

It states: “The result of this continued mismatch between tenant demand and properties available for rent means renters looking for a new place to move are faced with the most competitive rental market Rightmove has ever seen.

‘There are more than three times as many tenants inquiring as rental properties are available, meaning landlords are more likely to have multiple suitable tenants to choose from.’

However, there were some signs that conditions might be easing, with the number of rental properties coming onto the market last month up 5% compared to January and up 16% between February and March.

Tim Bannister, director of property data at Rightmove, said there are several factors behind the market challenges.

He said: “On the supply side we are hearing from agents and landlords that tenants are taking longer leases, which has prevented some of the stock that would normally come back onto the market.

“When it comes to demand, we’re still seeing the impact of the pandemic, with tenants weighing what they need from a home and how close they need to be to work where they can afford it.”

Figures show that alongside London, Wales has seen the biggest annual rise in rental prices – up 13.9% to £882 a month – followed by the North West with a 12.8% rise to £937 a month.

Swansea, Manchester and Margate were among the identified rental hotspots with increases of 19.7%, 19.3% and 18.8% respectively.

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Sarah Y. Kim

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