ONS Private Housing Rental Prices: Rents rise at fastest in five years

Sarah Coles, senior personal finance analyst at Hargreaves Lansdown, comments on the ONS Private Housing Rental Prices Index, which shows rents rise at fastest in five years.

Key points from publication:

Rents rose 2% in the 12 months to January. Excluding London, they were up 3%.
This is the fastest overall rise since February 2017.
UK rental prices have increased 12.3% since January 2015.
In the East Midlands, annual rent rises hit 3.6%.
In the past year, rental prices in London have risen just 0.1%.
But newly advertised rental prices are rising much faster across the UK – Zoopla found that rents are up 8.3% in a year to £969 a month.

Sarah Coles comments:

“Rents are rising faster than any time for the past five years, forcing tenants to choose between squeezing their spending even harder, or uprooting their life. Either way, they’ll end up worse off.

“The official figures show rents are up 2%, and 3% outside London. However, they measure the rents people are currently paying, including everyone who has been in a rental property for the best part of a year, and newly advertised rents are rising far faster. Zoopla shows new rents are up 8.3%.

“It looks like rises are set to go further too. RICS research found that a slide in the number of properties for rent and another rise in tenant numbers is filling agents with confidence that rental prices will be on the march for months or even years. It expects rent rises to average 5% over the next five years.

“The HL Savings and Resilience Barometer produced in partnership with Oxford Economics shows that renters have already faced horrible blows to their finances over the past year, and are much less resilient than their homeowning counterparts. Renters are far less likely to have money left at the end of the month, so a rent hike will hit them hard. They’re also less likely to have emergency savings to fall back on, so they can’t dip into savings to cover their costs or to fund a move.

“Those who can’t stretch their finances to cover their costs face the horrible upheaval and expense of moving home. If their current landlord withholds any of their deposit, they’ll have to find more cash to cover this, on top of the moving costs themselves, which means they’ll be worse off – whatever they do.”

Kindly shared by Hargreaves Lansdown

Main photo courtesy of Pixabay