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Tenants squeezed as rents increase by highest amount on record in UK

Rents in the UK increased by the highest amount on record last month, according to figures.

Prices paid by tenants rose 5.3 per cent in the 12 months to July, the biggest percentage change since the Office for National Statistics (ONS) started collecting data in 2016.

It showed UK average annual rent increases accelerated to 5.3 per cent from 5.2 per cent the previous month.

With a declining supply of rental properties and more people unable to afford to get on the housing ladder, experts warn that the increases are likely to become sharper.

The rise was even greater in London, where rents have surged 5.5 per cent – the biggest increase since records for the city began in 2006.

A third of all UK rental expenditure is in London, the ONS said. By contrast, house prices in London fell 0.6 per cent in June compared with the same month last year, the only region to register a fall.

Similar rent rises to London were in the West Midlands, Yorkshire and Humberside. Tenants in Wales had average rises of 6.5 per cent while those in Scotland were up 5.7 per cent.

Aimee North, of the ONS, said: “There was another record annual increase for UK rents in the latest month.

“London rental prices rose steeply to their highest annual rate since records began in 2006. The lowest annual inflation was in the North East (4.6 per cent).

Tom Bill Head of UK Residential Research at Knight Frank Image taken from
Tom Bill Head of UK Residential Research at Knight Frank warned the squeeze on tenants will ‘not end any time soon’ (Photo: LinkedIn)

The ONS data is for private rents only and does not include social housing.

 The average cost of a newly let property in Great Britain was £1,273 in June, £110 more per month than the same time last year, according to the Hamptons Monthly Letting Index.

Nathan Emerson, of Propertymark, said: “There is a huge disparity in the number of properties available to rent compared to the continuously growing number of renters looking for a home, ultimately continuing to put pressure on rent prices.

“UK governments need to urgently address the problem and look to adequately incentivise the provision of desperately needed homes rather than forcing landlords out of the private rented sector with unfair regulatory and financial hurdles.”

Tom Bill, at estate agency Knight Frank, said: “The squeeze on tenants will not end any time soon.”

Tenants face even more problems going forwards as the supply of rental property falls, pushing rents up further he warned.

“It is an imbalance compounded by the fact landlords now face higher mortgage rates,” Mr Bill added.

Competition among renters is so intense that there are 20 requests to view every available property a recent survey found.

Average UK house prices increased by 1.7 per cent annually, down from a revised 1.8 per cent rise in May, the ONS said, as the market cools as a result of the mortgage rate hikes.

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