Renters will see more pressure on rents into the summer

Tenants look set to continue feeling the financial pressure with low stock levels helping to boost rent price growth, one agency says.

Fine & Country also says that as summer approaches, demand will increase and prices will rise even further.

And one of the big issues facing renters, the premium estate agency says, is that rents are outpacing earnings growth – and there’s no sign of a respite.

‘Many regions of England and Wales still witnessing positive annual growth’

The firm’s managing director, Nicky Stevenson, said: “The average prime market rent is now £3,762, up 14% year-on-year, with many regions of England and Wales still witnessing positive annual growth.

“Annual prime rental growth in London is 21% and is still outperforming the rest of the country, driven by a shortage of supply.

“According to Hometrack, private rented housing supply has grown just 1% since 2016 and is set to remain generally static in 2023, particularly considering the recent interest rate rise and the ignoring of buy-to-let landlords in the Spring statement.”

She also points to a Dataloft poll that shows rental properties are still being snapped up with 63% of agents saying properties are taking less than a week to go from listed to let.

However, 39% of agents are also saying that their stock levels are lower than a year ago.

Average rents for new lets have increased

Ms Stevenson also says that average rents for new lets have increased by 11.1% in the last year, compared to an increase in earnings of just 6.7%.

She added: “In the last three years, rents have risen by 20%, an extra £2,220 a year, increasing strain on renters.

“Sigma Capital report that in the same period, net happiness amongst renters has dropped 8%, with 37% of renters concerned about security of tenure.

“These results highlight the need for more comfortable, affordable renting options, particularly in light of the uncertainty amongst renters and the ongoing cost of living crisis.”

Predicting increased home buyer choice

Fine & Country is also predicting increased home buyer choice in the coming months and prices will ‘moderate’.

Ms Stevenson says: “Current housing market metrics point to a mixed picture for the housing market.

“Sales volumes in February were 9% lower than the pre-pandemic average, although with average conveyancing times in the region of 12 to 16 weeks, this reflects the market in the immediate post mini-Budget period.”

She adds that although mortgage approvals are significantly lower than previously, the 10% uptick in approvals between January and February marks the most significant increase at the start of a year since 2011.

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