Price increase is being fuelled by a chronic shortage in available properties
Rental prices have increased at the fastest rate since records began, adding to the cost of living squeeze for tenants.
Private rental prices increased by 3.8% in the 12 months to October 2022, representing the largest annual percentage change since records began in January 2016, according to the Office for National Statistics rent inflation index.
Rents jumped across the country, with the biggest annual percentage increase recorded in the East Midlands, where prices were up 4.8%.
London saw the lowest percentage rise at 3%, however this was still the biggest increase in rents in the capital since July 2016. The ONS previously said the median monthly rent was £795 for England.
Rents have been climbing throughout the year after a lull in 2021, which the ONS attributed to lower demand for rental properties as a wave of employees abandoned cities to work from home.
Soaring rental prices have been fuelled by a chronic shortage in available properties.
A report from the Association of Residential Letting Agents, a trade body, said that for the four consecutive months between June and September the supply of properties available to rent did not grow.
Tenant demand has shot up 20% year-on-year, according to property website Rightmove yet the number of available properties is down 9%.
The National Residential Landlords Association, which represents property investors, said tenant demand was likely to grow further as mortgages became more expensive, meaning more pain for renters who are already struggling with higher bills.
Ben Beadle of the NRLA said: “The Government’s strategy for the private rented sector lies in tatters. The fact that the supply of homes to rent is falling despite an increase in demand is a damning indictment of tax decisions which serve only to increase rents and make home ownership more difficult to achieve.
“Further tax rises on the sector risk making an already bad situation worse. Ministers need to recognise that a healthy and vibrant private rental market needs to sit alongside, rather than be in competition with, efforts to support homeownership.”
Rising rents came as national house price growth slowed to 9.5% in September, down from 13.1% in August as rising mortgage rates hammered affordability, the ONS said. Prices remained flat month-on-month at £295,000.
