Image source, PA Media
By Kevin Peachey
Cost of living correspondent
Rapid rises in the cost of renting have already peaked, according to property portal Zoopla, although tenants will still have to pay more next year.
Its latest report into the rental sector suggests rent on new lets was 9.7% higher in October compared with a year earlier, averaging ￡1,201 a month.
Although still a big increase, the rise in costs has cooled, with Zoopla predicting the slowdown will continue.
It expects a more "balanced" market in 2024 will help tenants.
Rents across the UK have been rising sharply - with the average cost of a new let going up by 31%, or ￡3,360 a year, over the last three years, the Zoopla data shows.
High demand has driven the increase, while supply has narrowed with some private landlords selling up.
Richard Donnell, executive director at Zoopla, said the strength of the jobs market, a rebound after Covid, immigration and high mortgage rates facing potential first-time buyers had combined to increase demand from tenants.
Many people have downsized or been caught up in bidding wars. Some families, data suggests, have been more likely to rent smaller homes in recent years.
According to the 2021 census, four in 10 people who rent through a private landlord or agency are in two-bedroom homes.
Mr Donnell suggested that rents had risen too fast in some areas, with signs of some asking rents being cut.
He said that annual rental growth would slow to 5% by the end of next year, which would be the slowest since September 2021.
"The supply-demand imbalance in rented housing is not going to disappear in 2024, however, the market is set to become more balanced than it has been over the last three years," he said, with jobs under more pressure and financial constraints continuing.
However, the picture will not be the same across the UK, he suggested.
Much of the slowdown will be driven by London, where rents are higher than anywhere else.
Scotland is bucking the UK trend with rental growth continuing to increase, Zoopla figures showed. Rental growth in Edinburgh was the highest across UK cities at 15.2% a year in October, with Glasgow recording a 13.2% increase.
On Monday, the trade body for mortgage providers said that lending for homebuyers would slow next year, and mortgage arrears among owners would increase.
How you can get to the front of the renting queue
Agents say there are some simple ways to make it easier to secure a rental property, including:
Start searching well before a tenancy ends and sign up with multiple agents Have payslips, a job reference, and a reference from a previous landlord to hand Build up a relationship with agents in the area, but be prepared to widen your search Be sure of your budget and calculate how much you can offer upfront Be aware that some agents offer sneak peeks of properties on social media before listing them
There are more tips here and help on your renting rights here.
Related Topics
Money Personal finance Housing market Renting Cost of living
Rental pressure pushing families to smaller homes
Published
29 November
Tenants and MPs call for end to rent bidding wars
Published
6 days ago
Student rental market at 'crisis point' - report
Published
26 October
What are your rights when you're renting?
Published
21 July