The likelihood of tenants struggling to pay rent is growing every month, experts have warned, as latest data shows rents rising to record levels.
- Typical rents were £1,213 a month in May, up 1.2% on the previous month
- Rents in London reach £2,039 a month, the highest ever recorded
- Cheapest rental area is the North East, where average rents are £632 a month
Average rents in Britain stood at £1,213 a month in May, up 1.2% from £1,199 the previous month, according to HomeLet. Andy Halstead, of HomeLet said,: 'rental prices remain high, which brings a level of risk for both tenants and landlords. We are again urging landlords to consider rent guarantee insurance as the likelihood of tenants struggling to pay their rent grows with each passing month."
The London rental market in particular shows few signs of slowing down - average rents in the capital climbed to £2,039 a month, the highest ever recorded, according to HomeLet. The cheapest rental area in Britain is the North East, which saw another dip, dropping 2% a month to £632 a month.
Mr Halstead said, "the fact that the London market is rising in terms of average price while the cheapest area in the country - the North East - is falling shows that the level of demand somewhat depends on location, but as a broad rule, there is a shortage of rental properties to meet demand, with many prospective tenants facing a real battle to secure a property. This frenzied market is likely to see prices continue to rise in the coming months."
The cheapest rental area in Britain is the North East, which saw another dip, dropping 2% a month to £632 a month. It follows another rental index being issue - from Goodlord, - which showed that six out of eight regions saw rents rise in May, with average rents standing at £1,111 a month in England, up from £1,103 in April. It said rents have risen for five consecutive months, with prices now at their highest since September 2022
The biggest shift in prices during May was recorded in the South West, where rents rose nearly 3%, up from £1,062 to £1,092. Only two regions recorded a decline in the cost of rent, although these were small. The East Midlands saw costs drop by 0.47% and the North East by 0.19%
CHANGE IN AVERAGE RENTS ACROSS THE REGIONS IN ENGLAND
| Area |
April 2023 |
May 2023 |
Month on month % change
|
| East Midlands |
£946 |
£941 |
-0.47% |
| Greater London |
£1,897 |
£1,903 |
0.32% |
| North East |
£819 |
£818 |
-0.19% |
| North West |
£880 |
£888 |
0.83% |
| South East |
£1,210 |
£1,219 |
0.72% |
| South West |
£1,062 |
£1,092 |
2.76% |
| West Midlands |
£908 |
£919 |
1.23% |
| England |
£1,103.19 |
£1,111.28 |
0.73% |
Source; Goodlord
The amount of time a property is not rented out and is left empty - known as a void period - held steady in May, suggesting that market demand remains strong as the rental market heads into summer. The Goodlord index revealed that the average void period in England remains at 19 days, which is the same figure as recorded in April.
The highest voids can now be found in the West Midlands, where averages stand at 23 days. London retains the title for lowest void periods, currently at 12 days. Three regions saw a notable shift in void periods during May; with the East Midlands, North West and South West all seeing void lengths drop by more than 9%.
AVERAGE VOID PERIODS ACROSS THE REGIONS IN ENGLAND
| Area |
April 2023 |
May 2023 |
Month on Month % change |
| East Midlands |
22 |
20 |
-9.1% |
| Greater London |
13 |
12 |
-7.7% |
| North East |
17 |
18 |
5.9% |
| North West |
22 |
20 |
-9.1% |
| South East |
18 |
17 |
-5.6% |
| South West |
22 |
20 |
-9.1% |
| West Midlands |
22 |
23 |
4.5% |
| England average |
19 |
19 |
0.0% |
Source; Goodlord
Oli Sherlock, of Goodlord, said, "as we head into what are traditionally the busiest months of the lettings calendar, it remains to be seen as to whether we'll hit the same rental cost highs recorded last summer. 'But the data is pointing to the ongoing rise in prices continuing and, with voids also holding firm, the market is definitely primed to heat up as we head into June."
The rise in rents follows a decline in house prices, according to Britain's biggest building society. The average house price recorded its biggest annual fall in nearly 14 years in May, as Nationwide warned that housing market challenges look set to increase in the short term. Property values fell 3.4% annually in May, representing the biggest drop seen since July 2009 when an annual fall of 6.2% was recorded, Nationwide said.
The average house price fell 0.1% monthly, against a 0.4% upturn in April. The average UK house price in May was £260,736, according to Nationwide's index.
How much can my landlord raise my rent by? Rules explained after interest rate hikes
Rising interest rates are putting pressure on homeowners - and for renters, this could filter down into how much rent you pay each month. The Bank of England base rate now sits at 4.5% following twelve consecutive rises in a row since December 2021. Base rate rises affect most mortgages unless they're fixed.
This means if your landlord’s mortgage has significantly increased over the last year, it is likely your rent will go up as a result to factor in the extra amount they're paying. But how much can your rent go up by, and what can you do if you’re unhappy about the increase?
An estimated 1.4 million homeowners are currently on a variable mortgage deal, including trackers which move in line with the base rate.
How much can your landlord put your rent up by?
This all depends on what type of tenancy you've agreed to. If you have an assured shorthold or assured tenancy, Citizens Advice states your landlord can increase your rent based on average cost of similar properties in your area. This is known as the "market rate" so make sure you do your research and check what similar properties near you are being rented out for.
If you have a rolling tenancy, so where you pay monthly or weekly, your landlord normally isn't allowed to put up your rent more than once a year. For a fixed-term tenancy, your landlord can only increase your rent mid-contract if you agree to this, or if it is written into your tenancy agreement.
If you say no, they can put it up after your fixed term ends and you'll need to sign a new contract. Your landlord must give you a minimum of one month’s notice if you pay rent weekly or monthly - or if you are locked into a yearly tenancy, they must give six months’ notice.
If you live with your landlord, they can technically put up your rent by any amount - and they can do this at any time if you don't have a fixed agreement in place. Your landlord can’t increase your rent during your fixed term unless you agree or your agreement allows it.
How to challenge rent increases
Speak to your landlord as soon as possible and ask if you can come to some agreement about the rent increase.
For example, if your landlord wants to raise your rent from £900 per month to £1,000 per month, suggest meeting in the middle and paying £950. If you think your rent increase is unfair and does not reflect prices in your area, you should flag this to your landlord.
Make sure you have examples of properties being rented nearby to back up your argument. If you can't reach an agreement with your landlord over a rent increase, speak to Citizens Advice who can help you decide your next step. If you aren’t able to stop your rent being increased, and you don’t pay the new amount, your landlord can try to evict you.
