The UK’s rental market is facing a severe crisis, with an average of 21 prospective tenants competing for each available property, as the number of homes to rent continues to shrink.
According to Zoopla, a leading property search platform, the availability of rental homes is now 24% lower than before the pandemic, driven by landlords’ reluctance to enter or expand within the market.
Rents across the UK have surged by 30% over the past three years, and while the pace of rental inflation has slowed to 5.4% annually, this still outstrips the 5.1% growth in average earnings over the past year. As of July, the average national rent reached a record high of £1,245 per month, £63 more than a year ago.
Richard Donnell, Executive Director at Zoopla, cautioned that further regulatory or tax changes in the forthcoming budget could exacerbate the current supply crisis. “Any new policy or tax changes that result in a reduction in supply will simply push rents higher, hitting low-income renters hardest,” he warned. Donnell urged policymakers to focus on increasing the supply of rental homes as the key to slowing rental inflation and expanding tenant choices. “As things stand, the growing unaffordability of renting is the only route to slower increases in rents,” he added.
Despite a slight increase in supply from the lows seen during the pandemic, the market remains highly competitive, with demand still far outstripping availability. The average number of would-be tenants per rental property has doubled since before the pandemic.
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