UK House Rents continue to rise to Record Highs



House rents in the UK have continued to rise due to soaring borrowing costs, according to recently released data from the UK Office for National Statistics (ONS).

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House rents in the UK have continued to rise due to soaring borrowing costs, according to recently released data from the UK Office for National Statistics (ONS). In the 12 months leading up to April 2023, house rents increased by nearly 5% year-on-year, marking a record high since 2016. In London, the increase was even more substantial, with rents rising up to 5%, the highest level since November 2012.

The rise in house rents can be attributed to the increasing cost of property ownership in the UK as a result of soaring borrowing costs. The average interest rate on mortgage loans rose by 4.4% in March, the highest it has been since 2008, according to data from the Bank of England (BoE).

UK House Rents continue to rise to Record Highs

Rising mortgage costs in the UK are reflective of the BoE's continuous raising of interest rates from 0.1% in November 2021 to 4.5% presently, with further increases expected in June following April's slower-than-expected inflation rate.

This increase in borrowing costs has also led to falling UK house prices, with ONS figures revealing that UK house prices declined by 1.2% between February and March, marking the sixth consecutive month of decline. Despite this, the median house price in the UK currently stands at £285,000 (about $348,000), which is £8,000 below its peak in November 2022 but still £11,000 more than in March last year.

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Year-over-year home price growth slowed down to 4.1% in March, marking the slowest rate of growth since September 2020 and a 5.8% decrease from February.

The increase in house rents in the UK can be traced back to the rising cost of property ownership as a result of soaring borrowing costs, with further interest rate increases expected from the BoE in June. The falling UK house prices have also brought down the growth rate of home prices in the country.

UK House Rents continue to rise to Record Highs

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