Rental market feeling the pressure on affordability levels

Renter affordability is making the news, as high demand and a lack of rental stock continue to underpin rental value growth across all parts of the UK. This is according to Nicky Stevenson, MD of Fine & Country UK, who adds that with a sobering economic forecast, the response of the UK’s new Prime Minister to the cost-of-living crisis is crucial.

“The rental market remains highly competitive and fast-moving. According to RICS, rental values continue to rise across all regions of the UK and are predicted to climb further over the coming months as supply constraints remain a significant issue,” she adds. “The average rent in England and Wales is now £1,078. At £3,553, the average premium rent is up 16% year-on-year, fuelled by prime rent rises in the capital. The impact of the cost-of-living crisis on ability to pay rent is the biggest concern for renters over the next year, closely followed by landlords increasing rent. Recent research by Dataloft has found that more than 4 in 10 renters under 30 are spending over 30% of their monthly income on rent.”

Stevenson notes that it is perhaps no surprise that ‘bills included’ has become the most popular keyword term for renters searching for a new home on Rightmove, with ‘pets’ in second place and ‘furnished’ in third. “Research has found that an energy-efficient property with an EPC rated A or B, would encourage 1 in 4 renters to rent for longer, and that a utilities package tops the list of services renters use or would be interested in buying from their letting agent. Affordability, however, remains the key consideration for renters; access to outside space and pets allowed are the only attributes which over 10% of renters would be willing to pay more for,” she concludes.