Average UK rents rose 6.6% to £1,226 in April from a year ago, but this was the slowest rate of growth for tenant housing costs in two-and-a-half years, data from Zoopla shows.
The property website says annual rental price inflation, down from 10% a year ago, has fallen to its lowest rate since October 2021 “as demand weakens off a high base and affordability constraints drag on rental inflation”.
It adds: “Rental demand has softened over the last year but there are still 15 people chasing every home for rent, more than double the pre-pandemic average of six people.
“Available supply has grown by almost a fifth over the last year but there are still a third fewer homes for rent than over the pre-pandemic years due to low levels of new investment in rented homes.”
London has led the slowdown with average rents rising by just 3.7%, down from over 13% this time last year.
The average growth in rents across the rest of the UK, outside of London, is currently 8%. The highest increases in rents were posted in the North East, at 9.5%, and Scotland, at 9.3%.
The report says: “While a general election means the Rental Reform Bill failed to make it to the statute books, rent reform is still needed in the rental sector to improve the protections for existing renters.
“The big policy focus of a new government should be on boosting the stock of homes for rent – both private and affordable – through increased housing delivery supported by additional funding and reforms to the planning system.”
The survey adds that the rental market “is still on track” for a 5% growth slowdown in 2024, which “is being driven by changes in demand and affordability, rather than any expansion in supply which should be a key focus area for any incoming government”.
Zoopla executive director Richard Donnell points out: “The number of private rented homes has been static since 2016 which has compounded the rise in rents over the last three years.
“Growing the supply of rented homes, both private and affordable, should be among the top housing priorities for the next government.”
