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Supply shortages and mortgage rate rises push UK rents

Private home rents in Great Britain have increased to their highest point on record after shortages in supply and mortgage rate rises, pushing the cost up by 10% over the past 12 months.

The average rent for new properties being put on the market now stands at a record £1,278 per calendar month outside London in the July to September period, according to Rightmove.

The property website found an even bleaker picture for prospective tenants in the capital, where the average advertised rent also hit a new high in the past quarter – £2,627 a month – a 12.1% increase on the same time last year.

It said an overall shortage of available rental properties was driving up prices. The average rental property across Great Britain now receives 25 inquiries from prospective tenants to letting agents, three times more than agents were receiving in pre-pandemic 2019.

Luton, 30 miles north of London, had the country’s hottest rental market over the past 12 months, with rental prices rising by a staggering 23.6%, or £200 a month.

Rightmove said that over the past 12 months, the rents asked by agents have risen by more than 20% in Loughborough, Edinburgh, Paisley, Preston and Staines. A host of other towns recorded increases in the 10%-20% range.

Ria Laitmer, a lettings manager at Clarkes in Dorset, described the rental market as “crazy”.

“We’re receiving mounting inquiries for each property to rent from would-be tenants, with queues of tenants arriving to open-house viewings and the majority being left disappointed as there are just not enough properties on the market to meet the demand,” she said.

Rental increases are also thought to have been exacerbated by landlords with buy-to-let mortgages trying to pass on sharp increases in costs caused by higher interest rates. Landlords have also been selling up in the face of higher costs.

Although mortgage rates have been falling recently, on Wednesday Rightmove separately published data showing the average five-year fixed mortgage rate is now 5.50%, up from 5.32% a year ago. It said the average two-year fixed mortgage rate is now 6.01%, up from 5.70% a year ago.

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