In almost every single region of England, Wales and Scotland, the cost of renting a property has risen in the last year – news that people who rent their homes will likely have already have felt in their pockets – with only the North East of England seeing a fall a prices.
According to property site Rightmove, asking rents (ie: the advertised rental price of a property) have increased almost across the board, with the highest increases seen in London and Scotland.
The average asking rent in London rose 8.2% in the last year, hitting a record £2,093 per month – the highest annual rise in the city since Rightmove began tracking data in 2012.
Scottish renters, meanwhile, have also seen a big year-on-year rise in asking rents, with the average up 6.7% to £696 a month. Rents in the North West rose 3.8% and rents in the East Midlands grew 3.6%. The only region that saw a dip was the North East, where rents dropped by just -0.3% to £546, according to the Rightmove analysis.
How Much Have Asking Rents Increased Where I Live?
Scotland: 6.7%
North East: - 0.3%
Yorkshire & Humber: 2.5%
East Midlands: 3.6%
East of England: 1.8%
London: 8.2%
South East: 1.5%
South West: 2.8%
Wales: 3.3%
West Midlands: 2.1%
North West: 3.8%
What’s Going On?
The increases have been driven by demand outstripping supply, Rightmove says, with the number of available properties dipping by 33% in London. Across the rest of England, Wales and Scotland, the dip in availability was 13%. “Outside London, the pattern is not as extreme, but there is still a significant drop in fresh choice,” Rightmove’s housing market analyst Miles Shipside said.
Shipside added that in London there had been a temporary fall in the cost of renting in 2016. That was prompted by landlords rushing to buy properties ahead of a new stamp duty tax on second homes, meaning the market was flooded with available properties. Now there were fewer available homes to rent, he said.
Essentially, the fewer properties there are on the market, the more a landlord can charge.
Has This Got Anything To Do With Brexit?
A recent study found that uncertainty about the UK’s exit from the EU is having a cooling effect on the housing market, with the number of sales agreed by estate agents dropping 7% compared with this time last year.
But the impact of Brexit isn’t seen as clearly in the rental market as in the house-buying market, Rightmove told HuffPost. That’s because renting isn’t as sensitive to outside events such as elections. The company said that other factors such as the stamp duty tax were to blame for the rise in rental asking prices.
In Scotland, where the tax system is different, the rise in prices is attributed to market growth in recent years.
This week the government announced it would scrap Section 21 in England and Wales, which allows landlords to evict tenants at the end of their contract with no reason. Landlords warned this too could lead to fewer properties on the market, because prospective investors might be put off.
But the move was welcomed by Shelter as an “outstanding victory” for England’s 11 million private renters.
“This change will slam the brakes on unstable short-term tenancies and give tenants everywhere a massive boost in security, for which the government will deserve great credit,” Polly Neate, chief executive of Shelter, said.