Tenants ‘paying the price’ of Government’s assault on PRS, new figures show

Rental unaffordability for single earners has hit a 10-year high, highlighting the need for more investment in the PRS to address the chronic imbalance between supply and demand.

Annual rental growth now stands at 12%, accounting for 35% of a single earner’s average income, according to Zoopla’s Rental Market Report.

The average monthly rent for a new letting is up £117 since last year, to £1,078, with rental stock down 38% compared to the five-year average and down 4% on last November.

Rental enquiries

Zoopla reveals that in stark comparison, rental enquiries per estate agency branch are 46% above the five-year average. 

Monthly rents are increasing fastest in the UK’s largest cities with large student populations; up 17% or £273 in London, Manchester (+15.6%), Birmingham (+12.3%), Glasgow (+14.1%), Bristol (+12.9%) and Sheffield (+12.4%).

As rental increases in tenancies are much lower at 3.8%, it’s prompting growing numbers of renters to stay put and avoid price rises, compounding supply problems.

Increase investment

Zoopla believes increasing investment in the PRS is the only way to ease the affordability pressures on renters in the medium term and to create a more sustainable rental market.

Executive director Richard Donnell (pictured) says renters are paying the price for low levels of new investment in private rented housing over the last six years. “Renters are having to adopt a range of strategies to deal with rising rents,” he explains.

“We have seen a rapid increase in demand for one and two-bed flats while some renters are now considering sharing a property to cover the cost of rent. Others may now need to stay at home with parents or relatives for longer until they can afford to rent privately.”

Adds Donnell: “In the short term, we expect the growing unaffordability of renting to reduce rental increases in 2023 to 5%.” 

Read more: Major landlords calls on Government to change direction on PRS.