The average monthly cost of renting has risen by 46 per cent in the last decade, as rental market buckles under the pressure of high tenant demand.
The latest research by Zero Deposit, the alternative to a tenancy deposit, has revealed how surging demand for rental homes has caused the average rent to spiral in recent years, with UK tenants now paying significantly more per month than they were a decade ago.
What’s more, the average cost of a rental deposit has increased for the first time since the introduction of the Tenant Fees Act 2019 in June 2019.
Analysis of rental market data shows that the current rental market is buckling under the pressure of high demand from tenants.
The figures show that there are currently over 5 million deposits held across the UK, a 66 per cent increase on the 3 million held a decade ago.
This number has climbed by 5 per cent in the last year alone, having also increased by 5.5 per cent between 2022 and 2021, the highest rates of annual growth seen since 2017.
What’s more, the latest figures on the supply of private rental sector stock shows that in 2023, there were an estimated 5.22 million rental homes across the UK, an annual reduction of -0.3 per cent and down -3.1 per cent versus the peak of 5.38 million private rental homes seen in 2017.
The result of this growing demand versus a lack of available homes? Rental prices have spiralled in recent years.
The latest figures show that the average monthly rent climbed to £1,232 in 2023. This marked a 9.7 per cent increase on the previous year, with the average rent also increasing by 9.7 per cent between 2021 and 2022 and by 5.8 per cent between 2020 to 2021.
To put this into perspective, in the seven years between 2014 and 2020, the average UK rent increased by an annual average rate of just 2.3 per cent.
Commenting on the analysis, Sam Reynolds, CEO of Zero Deposit, said: “It’s clear that our reliance on the rental market has been growing consistently over the last decade, however, demand for rental homes has exploded in recent years as soaring house prices have forced many to postpone their plans to purchase.
“Given the fact that house prices are only predicted to increase further this year, it’s unlikely that this cultural shift will change anytime soon.
“We simply don’t have an adequate supply of quality rental accommodation to satisfy this surge in demand and the consequence of this market imbalance has been a huge acceleration in the cost of renting.”
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