Rental costs rise as workers return to the office
The cost of renting an apartment in a city is rising, as demand continues to outweigh supply.
According to Zoopla, the average cost of renting a home is close to £1,000 a month, as soaring demand pushes prices higher.
But despite the jump in the cost, rents account for an average of 37% of a single earner’s pay before tax, which is broadly in line with the 10-year average of 36%.
Renters are now paying £969 per month across the UK which equates to £62 a month more than at the beginning of the pandemic, according to property portal’s latest Rental Market Report.
Meanwhile the BBC reports that this higher demand is set to ease in the coming months, in part owing to the rising cost of living facing renters.
It may be recalled that demand for city-centre properties to rent dropped dramatically, particularly in London, during the pandemic lockdowns.
Source: Zoopla Rental Index
Zoopla’s report indicates that the rate at which rents are rising reached a 13-year high of 8.3% in the final three months of 2021. The average annual rent for those agreeing a new let is now £744 higher than pre-pandemic levels.
Even so, rents are only 12% higher than they were five years ago, after they fell in some areas during the early stages of the pandemic, the report suggests.
The ongoing shortage of rental homes is expected to underpin modest rental growth in the coming months, particularly in city centres, although affordability constraints will act as a brake on larger rises.
Source: Zoopla Rental Index
In response to the rise in rents, Zoopla’s head of research Gráinne Gilmore said: “The January peak in rental demand will start to ease in the coming months, putting less severe pressure on supply, which will lead to more local market competition, and more modest rental increases.
“The flooding of rental demand back into city centres, thanks to office workers, students and international demand returning to cities, means the post-pandemic ‘recalibration’ of the rental market is well underway.”
Going forward, rents are expected to rise by 4.5% across the UK excluding London in 2022, and by 3.5% in the capital.
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