Introduction
Recent data reveals that rental prices in the private rental market in the United Kingdom (UK) has increased by 4.7% over the past 12 months. This leads up to March 2023, which is higher than the previous 12-month period, where rental prices had gone up by 4.4%. This hike in rental prices was observed in all regions of the UK, with an annual increase of 4.5% in England, 4.2% in Wales, and 4.9% in Scotland.
Additionally, the East Midlands region of England registered the most significant annual percentage change in private rental prices, while the West Midlands experienced the lowest change. In London, the annual percentage change in private rental prices was 4.6% in the 12 months leading up to February 2023.
Average rents by region
Despite the increasing prices across the UK, there has been a drop in rental rates in London, whereas the remaining regions observed an annual growth rate in the latter half of 2021. This growth has continued in 2022, with all regions, including London, observing an increase in the annual percentage change of rental prices. This indicates the most robust annual percentage change in London since January 2013.
The most expensive and cheapest places to rent in the UK
With an average monthly rent of £631, the North East is the most affordable region to rent a home in the UK. On the other hand, the average rent in London (£1,978) is twice as much as in the North, Midlands, Wales, Scotland, and Northern Ireland. The major cities with the lowest rental rates are Aberdeen, Belfast, Newcastle, Sheffield, and Liverpool, with average rents below £800 per month. The smallest proportional increase in rental prices was observed in the East of England, where rates rose by 4.1% from £1,097 to £1,143, making it one of the pricier places to rent a property in the UK.
The median monthly rent for Inner London and Outer London
The greater London area remain the most expensive regions for renting in the United Kingdom, with all three experiencing a significant rise of at least £150. Kensington and Chelsea recorded the highest median monthly rent in Inner London at £2,199, while Lewisham had the lowest at £1,300. Similarly, Richmond upon Thames had the highest median monthly rent in Outer London at £1,600, and Sutton had the lowest at £1,100. In contrast, the North East had the lowest median monthly rent in England at £505.
2023 second-quarter housing trends
As per the UK House Price Index released by the Office for National Statistics (ONS), the average house prices hit an all-time high of £295,608 in November 2022. Although the average interest rate on a two-year fixed-rate mortgage has decreased to 5.3% as of February 2023, it may still surpass the rates paid by some mortgage holders earlier. This may deter some prospective buyers from taking on mortgage debt at higher rates, leading to a potential softening of the housing market. The Office for Budget Responsibility (OBR) has predicted a possible decline in house prices, which may occur in the latter half of 2023, but prices could still remain above the levels of the previous year.
Conclusion
To sum up, the existing condition of the housing market in the UK poses difficulties for individuals looking to rent due to the steep house prices and mortgage interest rates. Nonetheless, since the market may ease in the near future, it is advisable to begin exploring rental possibilities now. Make sure you don't lose the chance to acquire your ideal residence - act promptly and start your search today.
