Rents can’t stay this strong forever

Zoopla is warning that the recent sharp rise in rents has stretched affordability with the average rent now accounting for 37 per cent of gross earnings for a solo tenant.

For the majority of renters who live with partners or share accommodation, the proportion of gross earnings used for rent falls to 18.5 per cent on average

However, the portal reveals that the rental market is highly localised.

While rent accounts for 21 per cent of joint income in Manchester, in the local authority of Copeland, which includes the towns of Whitehaven and Cleator Moor, average rent accounts for just seven per cent of average joint income.

As in the sales market, many renters will be centred in a location due to family, work or school. However, there will be a proportion of renters who are able to move to other markets in order to cut their rental outgoings.

Another way to do this is to stay put in their current rental property, as often tenants in situ can strike alternative rental deals with their landlord, especially landlords keen to avoid a void period on their property.

Zoopla’s data shows that the average tenancy length has been rising since 2017. While this would be expected during the pandemic, when moving was more challenging, there has been a tick up again since the end of the lockdowns.

The average time between rental listings coming to the market has risen by five months, from around one year in 2017 to 75 weeks in March 2022.

The portal says rental growth continued to gain momentum in the first quarter of this year as high levels of rental demand put upwards pressure on rents.

The average monthly rent climbed to £995 from £897 a year ago, taking the annual rate of growth to 11 per cent - based on new lets agreed.

The rate of rental growth has gained momentum across most markets in the last six months as post-pandemic demand surged back into city centre markets and the supply of properties for rent struggled to keep pace.

The rise in asking rents has been particularly acute in the flats market in London.

This sharp growth comes after a period of moderate rental growth in most of the UK however, with growth outside London pegged at between one and four per cent for much of the last decade, as the purple line above shows.

Cumulative UK rental growth since the start of 2016 totals 16 per cent, says Zoopla.