UK Rental Market Report - Q3 2022
“The chronic shortage of homes for rent and strong demand is pushing rents higher. Renters are adapting their strategies and starting to seek out smaller homes at lower rents and running costs.”
Rental growth has accelerated over the last 12 months from an annual rate of less than 2% in July 2021 to 12.3% today. Average rent increased by £115 per month since last year, to stand at £1,051 per calendar month. Rental growth is out-pacing earnings growth in all regions and countries of the UK.
Executive Summary
Rental growth is close to peaking at 12.3% per annum. Average rents have risen by £115 per month over the last year to £1,051
London’s rental growth, at 17.8%, is unsustainable and reflects a rebound in rents after a double-digit decline over the pandemic
Rising rents are adding to cost-of-living pressures, pushing renters to look for smaller homes – demand for 2-bed flats has increased
The shift to smaller homes is being re-enforced by rising energy costs, with the gas needed to heat a purpose-built flat 40% lower than that for a 3-bed house
The chronic undersupply of rental homes shows no sign of changing, which means that rents will continue to post above average growth rates into 2023 despite cost-of-living headwinds
