Did you know that 1 in 5 households in England and Wales now lives in rented accommodation?
Renting is quite possibly as popular as it has ever been. The UK cost-of-living crisis and rising inflation makes it difficult for first time buyers and current renters to raise enough capital to put down a sizeable deposit and buy a property. Instead, for those who want to live independently with a roof over their head, renting is the most viable option.
Renting is not cheap, and it is therefore no wonder that so many people struggle to purchase their first property until their 30s or 40s. But has the price of renting peaked in the UK in recent months, or are costs set to keep rising further? Read our blog below for an in-depth look at this topic.
Where are the most expensive cities to rent in the UK?
The most expensive cities in the UK are in the south of England. This is typically considered the most ‘desirable’ place to live and that’s why people are willing to pay more to rent in these locations.
Unsurprisingly, RightMove and Zoopla ranks London as the most expensive city to rent in the UK, with an average price of almost £2,000 per month[1]. Many sources confirm that Brighton is the second most expensive city to live in, followed by Cambridge and Oxford[2].
How expensive is it to rent in London?
London is the most expensive city to rent in the UK, but some boroughs are far more affordable than others.
According to Zoopla[3], the most expensive part of London to live in is Kensington & Chelsea, which has an average monthly rent of £3,531. The second most expensive borough is the City of Westminster, which has an average monthly rent of £3,140.
On the opposite end of affordability, the most affordable London borough to live in is Bexley, with an average monthly rent of £1,375. This is followed by Havering, which has a monthly average of £1,414.
Which cities in England are affordable to rent in?
Not all English cities are as expensive as the south. When you travel further north, there are extremely affordable options.
Burnley has an average monthly rent price of £515, according to Zoopla, while Hull has an average of £558. Middlesborough’s monthly rent average is £563. These three cities are far more affordable alternatives for people looking for rented accommodation in England.
Has the cost of renting been going up?
Throughout the second half of 2022 and the first half of 2023, the cost of renting has been gradually increasing. The Office for National Statistics revealed that private rental prices paid by UK tenants rose 4.7 per cent in the year leading up to February 2023[4]. The same data found that renting prices increased the most in Scotland, by an average of 4.9%, compared to 4.5% in England and 4.2% in Wales.
Why has the cost of renting been going up?
The cost of renting in the UK has been going up primarily due to the cost-of-living crisis. As electricity, gas and water bills rise, it becomes more expensive for landlords to pay off their mortgages. To compensate for this, they have been increasing the monthly renting fee.
Has the cost of renting peaked?
Investment in UK property has slowed down in the past couple of years, due to the poor economic situation, and this means that less homes are available for rent than there has historically been in the previous decade.
According to Zoopla[5], average rents expressed as a percentage of earnings are now at – or close to – ten-year highs in all regions except London.
Many economists predict that the cost of renting will stagnate, because it is impossible for many people to afford significantly higher prices. However, it is possible that the cost of renting will continue to rise incrementally for the next few months as interest rates keep going up.
How long do I need to save to buy a house?
As we have indicated above, how long to save for a house varies depending on where in the UK you live. Most lenders feel most comfortable with a minimum 10% deposit on a property, and the amount of money this represents will be much higher in the centre of southern cities compared to more rural areas in the north.
Ideally, you should identify an attainable property and price range that you would be happy with, and then speak to a financial advisor about how this can be made a reality. Calculating 10% of the total house price will indicate the amount of money you need to raise – and how long this takes will depend on your incomings and outgoings.
If you want support with selling a tenanted property, contact We Buy Any Home today.
