Rents rising at fastest pace in 13 years, says Zoopla

Rents are rising at the fastest pace since 2008 as people rush back to city centres, according to property website Zoopla.

Private sector rents in the UK were 4.6% higher in September than a year before at £968 per month on average - the strongest growth seen in 13 years.

Outside of London, rents were up by 6%, marking a 14-year high, it said.

Zoopla said it was partly down to higher demand for city living amid limited supply.

Rents are up most in the South West (9%) year-on-year, followed by Wales (7.7%) and the East Midlands (6.9%).

As lockdown restrictions have eased and businesses have reopened in city centres, there has been a marked return to more built-up areas, it suggested.

Rents in London are now starting to increase as people return to the office. In its latest report, Zoopla said the English capital saw prices increase by 1.6% annually, compared with falls of nearly 10% around the start of the year.

Although rents in local areas can fluctuate significantly from month to month, cities such as Bristol and Nottingham also saw the average tenants' bill go up by more than 8% in the year to September.

Zoopla said demand for rented properties is still outstripping supply, putting upward pressure on prices.

Grainne Gilmore, head of research at Zoopla, said that the popularity of homes in higher price bands was also contributing.

"Households looking for the flexibility of rental accommodation, especially students and city workers, are back in the market after consecutive lockdowns affected demand levels in major cities.

"Meanwhile, just as in the sales market, there is still a cohort of renters looking for properties offering more space, or a more rural or coastal location."

And with fewer people made unemployed during the pandemic than had been expected, rents are expected to rise further in 2022.

By the end of next year, rents are forecast to rise by another 4.5%.

Dan Wilson Craw, Deputy Director of campaign group Generation Rent, said the new report was "terrible news" for anyone trying to move right now.

"We have been hearing from renters who have lost bidding wars for homes, or failed affordability checks, so are being priced out of their areas," he said.

He added that since the pandemic, private renters were more likely to be getting housing support through the welfare system.

"But the chancellor has frozen rates for another year, so these rises will make it even harder to find an affordable home. The government has to do much more to bring rents down - that means building more homes, including social housing," he said.

At last month's Budget, Chancellor Rishi Sunak announced almost £2bn would be invested by the government into building new homes on derelict or unused land in England.