UK Rental Boom Ends Rents Rise At Slowest Rate In Four Years

The cost of renting a home in the UK continues to rise, but at a significantly slower pace than in recent years. According to data from Zoopla, the average rent for new lets increased by 2.8 per cent over the past year to £1,287 per month. This represents the slowest rate of growth recorded since July 2021.

Over the past three years, rents have surged by more than 20 per cent on average. However, the slower rate of rental inflation suggests that the UK rental boom has come to an end. Richard Donnell, executive director at Zoopla, welcomed the news of decelerating growth for renters but emphasised that rents are unlikely to decline any time soon.

The demand for rental properties remains elevated but is beginning to soften. Compared with the summer of 2022, the number of people searching for rental homes has dropped by 16 per cent, though it remains 60 per cent higher than pre-pandemic levels. Meanwhile, the supply of rental homes has risen, with 17 per cent more homes available than a year ago, although this is still 20 per cent lower than supply levels in 2019.

Despite these shifts in supply and demand, continued competition for rental properties is expected to sustain modest upward pressure on rents. Zoopla predicts a further rise in rents by 3 to 4 per cent over the remainder of this year.

Regional variations in rental inflation remain prominent. Cities such as Leeds, Dundee, and central London have seen falling rents, while more affordable areas, including Wigan and Chester, are experiencing rising rental costs. The north east is currently the UK’s fastest-growing rental hotspot, with rents up by 5.2 per cent over the past year. By contrast, growth has slowed significantly in Yorkshire and the Humber, where rents increased by just 1.1 per cent.

While cooling rental demand is welcome news to many, the enduring imbalance between supply and demand continues to shape the outlook for renters across the country.