Rent rises to moderate following interest rate bombshell - forecast

Rent rises could finally be set to slow down because more housing stock is becoming available due to the cost of living crisis, a property expert is warning.

Recent reports have suggested that rents are outstripping inflation in more than a quarter of Britain's local authority areas. According to Zoopla, prices have rocketed by at least 10.1 per cent in 102 council districts as tenants face a crippling lack of supply.

But Jonathan Rolande, from the National Association of Property Buyers, believes the surge could finally be about to end. 

“Increases will now slow to around six per cent per annum. Why? Well the cost of living crisis is leading to more stock becoming available. Plus new homes that don’t sell are being let, and many more people are now sharing and lodging rather than living in single households.

“In terms of the regions that will continue to see the highest rents, London and Manchester have risen sharply in recent months and they in theory, have the furthest to fall. We will likely continue to see large cities leading the field when it comes to increases – quite the opposite of 2020 when there was an exodus to the seaside and country.

According to the recent Zoopla survey, three London boroughs have recorded rent rises over double the rate of the consumer prices index. 

The City of London recorded the largest jump in rents, with prices surging by 24.8 per cent in the last year. In Kensington & Chelsea, Westminster and Tower Hamlets, rents of new newly let properties climbed by 22.1, 21.4 and 20 per cent respectively.

All of the top 10 areas that recorded the largest jumps in rents in the 12 months to August were in London. In Islington, Hammersmith & Fulham, Camden and Newham, rent growth was in excess of 18 per cent.

Outside London, the steepest rent growth was in Salford, Greater Manchester, where prices jumped by 16.3 per cent. In neighbouring Manchester, rents climbed by 15.7 per cent. Another hotspot was Wales, with rents in Denbighshire and the Vale of Glamorgan rising by 16.2 and 15.4 per cent respectively.

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