Rental Prices in Britain Surge by 29% Amid Pandemic, New Research Shows

New research by Zoopla reveals a 29% surge in rental prices in Britain since the pandemic, with average rents climbing from £948 to £1,223 a month.

Rental prices in Britain have surged by 29 per cent since the onset of the pandemic, according to new research by Zoopla. Despite a slight slowdown in the rate of growth over the past year, rents are still significantly higher than they were four years ago. The average rent in Britain stood at £948 a month in January 2020, but has since climbed to £1,223 today.

While the overall growth rate has decelerated from the double-digit pace seen a year ago, rental inflation in Britain remains at 7.8 per cent, down from 11 per cent in the previous year. This slowdown may offer some relief to tenants, but it underscores the severity of the rental crisis in the country. The sharp increase in rents during the pandemic has pushed over half of rental homes above the £1,000 per month mark for the first time, nearly double the level seen five years ago.

The trend is particularly pronounced in the East and South East regions of England, where a significant portion of rented homes now command rents of £1,000 or more per month. Zoopla has cautioned that the growth in high-rent areas is now spreading to regional markets outside the traditionally expensive south of England. New city center rental markets are emerging in Scotland, the North West, the East Midlands, and the West Midlands, with a fifth of rented homes in these areas now exceeding £1,000 a month.

Despite no local markets having rents above £1,000 a month outside the south of England just three years ago, the rental landscape has shifted dramatically. The North East is the only region without markets above this threshold, while Yorkshire and the Humber have just 4 per cent. This disparity highlights the stark reality of the rental market in Britain, where high demand and limited supply continue to drive up rents.

While the imbalance between supply and demand has started to readjust, the rate of rental growth has slowed in the past year. Zoopla reports that the average letting agent now has 20 per cent more homes available for rent compared to last year, but still 28 per cent lower than pre-pandemic levels. Despite a decrease in the number of enquiries per property, demand remains high, indicating that affordability pressures are a key factor in moderating rental growth.

The moderation in rental growth is primarily attributed to weakening demand and affordability pressures, rather than a significant increase in available supply. Zoopla emphasizes that sustained expansion in rental supply is crucial to easing the pressure on tenants facing higher rent levels. While rental inflation in most parts of the country remains steady, Scotland stands out with a 11.6 per cent increase, the only region where it remains in double digits.

Looking ahead, Zoopla predicts a further slowdown in rents this year, halving to 5 per cent. However, the company warns that there is no immediate relief in sight for rental affordability, with no significant improvements expected until 2024.

The rental market in Britain continues to face challenges as rents soar to new heights. While the rate of growth has slowed, the underlying issues of high demand and limited supply persist, highlighting the need for sustained efforts to increase rental supply and improve affordability for tenants.