Average private rents in Great Britain are at a record high, now taking up 44% of the average wage. This new high marker represents a stunning jump from just 40% of the average wage five years ago. In doing so, it spotlights the mounting cost burden renters are shouldering across the country.
Average earnings are up 5% over last year. Yet rental cost increases remain much higher than this wage growth. Now, millions of them are facing a double-whammy of reality. Their rent is more than 50 percent of their take-home pay, increasing the impact of the ongoing affordability crisis.
In Q3 of this year, in England & Wales excluding the capital it was £1,385 pcm on average advertised for new properties coming to market. This third figure is mind-boggling! This record high is a strong indication of the rising struggles renters have to endure as they deal with a more competitive than ever renter’s market.
The supply of homes to rent is up by 9% since last year. We’re still down 23% of rentals from what we had in 2019. This combined with the tight supply of rental properties has created an explosive demand. Consequently, prices have skyrocketed in many desirable locales. Most striking, according to some counties, single-family rentals have per year increased more than 25% in just one year.
Burgess Hill in West Sussex, Billericay in Essex and Paisley in Renfrewshire are among the top risers for rent inflation. All of these featured cities are experiencing a jump of at least 17% or more. Places like Keighley in West Yorkshire and Frome in Somerset have seen a massive 27% increase. At the same time, Newquay in Cornwall and Gainsborough in Lincolnshire are close behind, with the next biggest rises of 23% and 22% respectively.
The new market dynamics are working in the opposite direction, suggesting a more gradual approach for new rentals entering the market. New listing trends show that newly available inventory is still down only 1% compared to this time last year. This is a sign that the available supply of rental homes just isn’t meeting the growing demand that is outpacing it.
“The result is a slower, more cautious market that’s likely to remain uneven over the next year or so,” said Daniel Fisher, head of lettings at the estate agent John D Wood & Co. His insights reflect a broader sentiment among industry experts who are observing the challenges renters face as they grapple with rising costs amid stagnant supply.