Private home rents in Great Britain have skyrocketed to record highs due to a combination of supply shortages and mortgage rate increases, pushing the cost up by 10% in the past year.
According to Rightmove, the average rent for new properties on the market outside London reached a record £1,278 per month between July and September. In the capital, the average advertised rent also hit a new high of £2,627, representing a 12.1% increase from the previous year.
Rightmove attributed the rising prices to a shortage of available rental properties. In fact, the average rental property in Great Britain is now receiving three times more inquiries from prospective tenants than in 2019.
Over the past year, Luton, located 30 miles north of London, experienced the highest rental market growth with prices increasing by a staggering 23.6% (£200) per month. Other towns such as Loughborough, Edinburgh, Paisley, Preston, and Staines also saw rental prices rise by over 20%.
Ria Laitmer, a lettings manager at Clarkes in Dorset described the current rental market as “crazy”. She mentioned the overwhelming number of inquiries for each property and the lack of available properties to meet the demand.
Landlords with buy-to-let mortgages have also contributed to the increasing rental prices as they pass on higher costs caused by interest rate hikes. Additionally, some landlords have chosen to sell their properties due to the rising costs.
While mortgage rates have recently fallen, data from Rightmove indicates that the average five-year fixed mortgage rate is now 5.50%, up from 5.32% a year ago. The average two-year fixed mortgage rate is now 6.01%, up from 5.70% a year ago.
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