Post-Covid rents rocket by £3,240 a year
Rents in the UK have continued to climb since the Covid-19 lockdowns, but the pace of increase is slowing, an analysis reveals.
According to Zoopla's latest Quarterly Rental Market Report, the annual cost of rent has risen from £12,000 in 2021 to £15,240, a 27% increase.
This outpaces the growth in earnings over the same period, which was 19%.
Despite this, the rate of rent growth in the UK is now at its lowest level in more than three years - it is 3.9% compared to 9.1% a year ago.
This slowdown is attributed to a narrowing imbalance between supply and demand, as well as growing affordability pressures on renters in high-rent areas.
'Rents rising faster than earnings'
Richard Donnell, executive director at Zoopla, said: “Private renters moving home have faced rents rising faster than earnings over the last three years. The number of rented homes hasn't grown since 2016 creating scarcity for renters at a time when demand has boomed on a strong labour market and the rising cost of home ownership.
"Rental growth has slowed but we expect an ongoing lack of rental supply to keep an upward pressure on rents.
“The ambitions to expand home building are important as the quickest way to ease the pressure on renters is to boost the supply of private and social rented homes.
"Private landlords will continue to play an important role and should be encouraged to remain in the market.”
Landlords are continuing to sell
The report also reveals that private landlords are continuing to sell rental properties due to stricter regulations and rising interest rates - despite the rent rises.
Zoopla believes the peak of this sell-off trend has passed but a recovery in landlord investment is unlikely until interest rates fall, and rental yields improve.
The property platform is forecasting a persistent housing shortage, with average rents rising 4% in 2025 to £15,850 annually.
Rent growth in major cities like London is expected to be slower due to affordability concerns and increased supply.
Stability for landlords and tenants
Angharad Trueman, Propertymark president, said: "Whilst it is encouraging for renters to see price rises starting to slow down, plus data showing the gap between supply and demand starting to narrow too, there is still much work that needs to be done to ensure that the private rental sector can deliver stability for both landlords and tenants.
"This ideally should include revisiting tax structures and regulations that are deterring long term investment in the private rental market."
She added: "It is vital there is robust provision that helps ensure the supply of rental homes grows in line with predicted increases in demand.
"The Renters' Rights Bill that is currently being debated in Parliament, which will pave the way for the biggest overhaul in regulations for the rental market in over thirty years must provide fairness and balance moving forward for all involved."
Tenants move for affordability reasons
Simon Thompson, the managing director of Accommodation for Students, said: "While rent growth has slowed, it remains high in those areas that have cheaper rents as tenants move for affordability reasons - which is then pushing those rents up.
"That also presents opportunities for landlords in these areas, but landlords still face the challenges of increasing regulation and higher borrowing costs."
He added: "Landlords need to be adaptable to changing circumstances and focus on providing quality, well-maintained properties in areas with strong demand.
"Also, while the peak of the landlord sell-off may have passed, the future of the private rented sector remains uncertain and those landlords who can navigate these complexities are likely to weather the storm and emerge stronger."
