Cost of renting hits three-year high

Cost of renting hits three-year high

By Nicu Calcea

Our latest quarterly Rental Market Report reveals rents are accelerating through a lack of supply and increasing demand.

The average cost of renting a property in the UK during the final quarter of 2019 was £886 per calendar month, an annual increase of 2.6% and the highest growth rate seen in three years.

According to our new Rental Market Report, this growth in rental prices is partly a result of increased demand (more people wanting to rent), and because of a decreasing supply of rental properties hitting the market.

Download the full report

2019 saw rental demand go up 8% with supply dropping by 4% compared to the previous year. This is a result of new investment in private rented housing falling since 2016, as private landlords respond to tax changes.

Earnings grow faster than rents

While the cost of renting is increasing year on year, there is some good news: so are salaries.

The Office for National Statistics estimates that average earnings have grown by 3.8% in 2019, compared to the 2.6% growth of the cost to rent. This means the average renter in the UK spends 31.9% of their earnings on rent, same as the year before.

Where it’s going up and where it’s going down

If you’re in York, Bristol or Nottingham, the average cost of renting has increased by more than 5%, more than double the UK average. This is in part due to a higher cost to buy and increased demand.

The opposite is true for Aberdeen, Middlesbrough and Coventry, the only three cities where the cost of renting has fallen compared to last year. Here, rent prices are going down as a result of reduced rent supply, weaker employment growth and affordable home ownership.

In London, the cost of renting has increased by 2.8% after three years of relatively weak demand. This new push is a result of a decrease in the number of homes available for rent.

Use the map below to search for your local authority and see where your budget can take you.

Take a look at our rental affordability data in the map above. It shows the average proportion of a single income (gross) that’s spent on rent in your local authority.

Started on the viewings?

Before you get ready to see your options, check out the average number of days a rental home stays on the market in the area, compared to the GB average of 17. It will give you an idea of how fast you’ll need to act when you find a property you like.

Found an ideal rental home?

Compare the monthly rental cost against the average for the area. If it looks out of kilter, don’t be afraid to negotiate.

Already a tenant?

If the renewal of your tenancy agreement involves a rent rise, cross reference it against rental price changes in the area over the last 12 months.

Top three takeaways

  • The cost of renting in the UK continues to grow (+2.6%), but so do earnings (+3.8%)
  • The cost of renting in York, Bristol or Nottingham is growing at rates higher than 5%, while in Aberdeen, Middlesbrough and Coventry it is falling
  • The average rent is now £886pcm, 27% more than a decade ago when it was around £700pcm