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UK average rents are falling for the first time since 2021…
- Average rents fell in December 2022, albeit by just £1
- The small drop is significant as rents have not fallen in a single month since 2021
- Real estate market professionals say rent increases are coming this year
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Rents have fallen for the first time in more than a year, but experts say the drop is just a slump and further increases are to come this year.
The average rent in the UK was £1,174 a month in December 2022, down 0.1 per cent or £1 from the previous month, according to the latest rent index from landlord insurance broker HomeLet.
While it may seem miniscule, that drop marks the first month-over-month drop in rents since November 2021.
Excluding London from the figures, the average rent in the UK was £977 per month, the same as in November 2022.
Rents may have fallen, but experts say bigger increases are coming due to rising mortgage prices
Average rents in London fell by 0.2 percent in December. The area with the largest drop in rents was the Northeast, where these costs fell by 1.4 percent £618.
HomeLet chief executive Andy Halstead said: ‘In the last month of 2022, average rents in the UK fell for the first time in over a year, albeit a fall of just £1 month-on-month.
“Even a small dip, rents remain at historic highs, including December 2022, which is only the second month on record in which the average rental property in Greater London has been priced above £2,000 per calendar month.”
More rent increases are coming
Experts agree that further rent increases are necessary as landlords sell over fears of non-payment and rising mortgage rates.
Halstead said previous research from Dataloft found that 40 percent of landlords’ top concerns in 2023 were that they wouldn’t get rent payments from tenants. He added that “rents are likely to continue to rise” in 2023, despite rising costs for tenants in other areas of their lives.
| Region | Rent reduction in £ | Rent decrease in % | Average December rent | |
|---|---|---|---|---|
| Northeast | £9 | 1.4% | £618 | |
| Northern Ireland | £ 7 | 0.9% | £774 | |
| Southeast | £5 | 0.4% | £1,235 | |
| South West | £4 | 0.4% | £1,081 | |
| Greater London | £4 | 0.2% | £2,007 |
Halstead said: ‘Tenants struggling to pay their rent are unfortunately likely to become a recurring theme across the country, and this in turn could lead some landlords to exit an already struggling market.
“This is likely to result in a continued shortage of rental properties to meet demand.”
Nathan Emerson, CEO of real estate organization Propertymark, said rents could rise this year as rental mortgage rates rise.
But most of the upward pressure on rents is coming from a lack of rental housing, he added.
Since 2019, the number of homes for rent from rental agents has fallen by 49 percent, according to research by Propertymark.