Average UK Rent Has Increased by 44.6% in 5 Years | RWinvest Skip to content

Average UK Rent Has Increased by 44.6% in 5 Years

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    Rent Rises Continue in Most UK Regions

    According to a recently published report from property website Home, asking rents in the UK are continuing to show positive growth in most regions.

    Overall growth has slowed down compared to last year’s record-breaking rises, but the supply-demand imbalance in the private rental sector has continued to exert upward pressure on rental costs in most UK areas.

    Home’s monthly report reveals data about the current lettings market, and the July publication has shown that while year-on-year asking rents have fallen in some regions such as Greater London, East Midlands, and the West Midlands where it seems an affordability ceiling has been reached.

    However, other northern regions of the country with more affordable rents continue to exhibit double-digit percentage growth, encouraging more buy-to-let property investment in these areas.

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      Rental Yields are Much Higher in the North

      The average UK asking rent is 2.5% higher compared to July 2023.

      According to Home’s website, UK rents have soared by 44.6% in the past five years. While London rental yields used to perform better, gross rental yields are much higher in the northern regions, supporting the market overall.

      The sales market has improved since 2019 despite a lacklustre performance in southern markets.

      The markets in Greater London and other southern areas are in ‘recovery mode’ while regions in the North, Scotland, and Wales have made up for lost ground after the shock price drop in December 2022 and continue to thrive.

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      Property Sector is Focused on Potential Base Rate Cuts

      One of the hottest topics in the current UK property market is the prospect of potential base rate cuts in the coming months. Many experts have forecast that the first cut may come this autumn in August or September.

      According to Home, the wider UK economy is facing challenges caused by high interest rates, while European competitors are already enjoying the benefits of their first-rate cuts.

      Another sector impacted by high interest rates is the new-build industry. Home states that much-needed investment in new-build and energy-efficient rental stock is experiencing a slowdown due to elevated interest rates, leading to reduced supply. For comparison, in July 2019, there were 122,000 properties available for rent, while today, the total number is 66,000.

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      Author

      Jessica Ferris

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      Jessica Ferris is a property writer at RWinvest, helping our readers stay ahead of property market trends with the latest news and statistics.

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