The Office for National Statistics reports a record 6.1% annual increase in private rents in England in 2023, reflecting the sharpest rise on record.
- Wales experienced the highest annual rent increase in Britain at 7.1%, followed by Scotland at 6.2%, and London at 6.8%.
- Tom Bill, head of UK residential research at Knight Frank, attributes the rent surge to low supply, fueled by landlords being disincentivized by tax and legislative changes, stating
“Low supply continues to cause financial pain for tenants as it keeps strong upwards pressure on rents. Landlords have been disincentivised by tax and legislative changes in recent years and there is no sign of that changing, particularly as the general election campaign gets underway this year. “Political interference has had the unintended consequence of making life tougher for tenants although we expect UK rental value growth to calm down marginally to 5.0 per cent this year as more demand is absorbed.”
- Bill predicts a slight calming of UK rental value growth to 5.0% in the coming year as more demand is absorbed.
- Jeremy Leaf, a north London estate agent and a former RICS residential chairman, emphasizes the challenges for aspiring first-time buyers and longer-term tenants due to rising average rents, making deposit saving more difficult.
- Leaf notes the impact of factors like the shortage of housing stock, landlords leaving the sector due to concerns over the tax and regulatory regime, and persistent high demand.
- Despite the challenges, Leaf mentions an increase in supply in the early weeks of 2024, helping to moderate ambitious rent hikes and narrowing the gap with demand.