A survey conducted by property website, Zoopla, has looked at the cost of renting a home in the UK’s cities during Q3 of 2019, compared to a year ago.
The property website’s latest Rental Market Report says that rents are rising at half the level of earnings. While renting may be becoming more affordable for many, rent affordability varies widely across the UK and is largely dependent on local economies as well as people’s ability to buy into the housing market.
Approximately 75% of 16-24 year olds and 50% of 25-34 year olds live in private rented homes. On average, tenants will rent their property for four years before moving home. Most rental households are in London, which houses a third of the UK’s rental property and where rent is significantly higher than other UK regions. 80% of people who exit the rental market do so to buy a property.
Property rental costs in London have rollercoasted over the last decade, with up to 10% growth in 2010-12 due to increases in employment and in-migration, and weaker growth in 2012-13 when this trend reversed. This was followed in 2014 by another surge in employment and faster earnings growth which again fell dramatically in 2016-17.
Average property rental growth in London is currently around 2.3%, an increase from 1.3% a year ago and is increasing at its fastest pace for three years.
The UK average is currently 2%, increasing from 1.3% a year ago.
Some UK cities have performed substantially ahead of others in terms of rental growth, and landlords of properties in Nottingham, Leeds and Bristol can rejoice, as tenants report that the cost of renting a home has increased faster than other cities in the last year.
Indeed, Nottingham property rental prices increased the most at 5.4% while Aberdeen’s property rentals dropped by an average -4.1% in the third quarter compared to the previous year.
Despite these findings, renting a home in a major city is beyond the means of many people who have to move further away from the city centre where homes are often more affordable.
The reasons for such variation are largely blamed on the increasing number of households buying their first home, which has in part released pressure from the rental sector, as well as local economic factors.