Rents continue to break records

Homelet's rental index for April showed that rising demand and limited supply are pushing rents higher throughout the UK, putting prospective tenants under even greater pressure.

The index is based on the average of actual rents achieved on newly agreed tenancies, not asking prices. According to Homelet/s data, national average rents rose by 1.3% month-on-month and by 9.9% over the last year.

Group COE, Andy Halstead said "Rental prices continue to rise across the board, with every region showcasing a monthly and annual rise. The situation we/re hearing about daily is one where tenants struggle to find available rental properties. Offers for rental properties are often rising above the asking price, with many landlords receiving multiple offers for their properties."

The national average rent now stands at £1,199, 1.3% above the March figure. When London is excluded, the figure is £1,006, up 1.2% for the month and by 9.9% from one year ago.

The Southeast and Scotland saw the largest increases, both above 2% for April. London rents continue to rise, reaching an average of £2,003, 1.2% higher than March and up 11% over the last year. Other notables include the East Midlands, Eastern England and the Southwest, all posting a rise of 1.2%.

Outlook for rental prices

The demand from renters continues to grow, with many potential buyers priced out of the market by rising interest rates, affordability constraints and a higher cost of living. This causes the rental market equivalent of 'bed blocking', resulting in a 34% decrease from historic norms in the number of rental properties coming onto the market.

As first time buyers adjust to higher mortgage payments, an increase in purchasers may take some of the heat out of rent rises. Zoopla anticipates rents continuing to increase, though moderating to 4% to 5% p.a. by year end.