[UK, 24/05/2023] The Office for National Statistics revealed that UK renters are experiencing a historic increase in rental prices, which grew at the fastest annual rate in over a decade. Private rental prices paid by tenants rose 4.7 percent in the 12 months leading up to February 2023.

Rent Increase

Despite a rent freeze in the last two months of the year, Scotland had the highest rent increases at 4.9 percent, followed by England at 4.5 percent and Wales at 4.2 percent. Rent increases also varied across England, with the East Midlands experiencing a 5 percent increase and the West Midlands seeing a 4 percent increase. London had the lowest annual percentage change due to the pandemic but experienced a 4.6 percent rent increase.

Outside London

Similarly, the average monthly rent outside London hit a new high of £1,190 in the first three months of this year. And for the first time, tenants in the capital are paying more than £2,500. Even though the pace of growth has decreased in the last nine months, the national average asking rents outside the London area has increased for 13 consecutive quarters since the end of 2019.

Annual Percentage Change

From November 2019 to the end of 2020, there was no significant change in the annual percentage of UK private rental prices paid by tenants. However, in early 2021, the annual percentage change in rents decreased.

The decrease was mainly due to the slowdown and later reduction of rental prices in London, possibly because of the pandemic. The lower demand could be attributed to remote working, which meant that people no longer had to live near their offices, and changes in housing preferences.

Second Half of 2021

Starting in the second half of 2021, private rental prices across all regions of the UK, except for London, began to rise. However, in 2022, the percentage change in annual rents increased in all areas, including London, and this trend continued into early 2023.

Housing Demand

In their February 2023 Housing Insight report, the Association of Residential Letting Agents (ARLA) states that the demand for housing still exceeds the supply, keeping the market unbalanced. While the pressure on rental rates has slightly decreased since last summer's peak, it persists.

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