Rents continue to rise across the UK, albeit at varying rates in different regions. London saw the highest rent inflation in England for the year ending May 2024, while the North East had the lowest. These variations, combined with regional differences in average mortgage repayments, mean that the transition to homeownership is harder for some tenants than others, depending on their location.
Rent increases vary across the UK
Average UK private rents increased by 8.7% in the year ending May 2024, slightly down from 8.9% in April 2024 (Office for National Statistics).
England saw a rent increase of 8.6%, and Wales 8.5%.
Scotland experienced a higher increase of 9.3%.
Northern Ireland had the highest increase at 10.3% (year ending March 2024).
London led the English regions with a 10.1% increase.
North East England had the lowest annual inflation at 6.1%, up from 5.8% in April 2024.
Inflation rates vary for new and existing tenancies
Looking specifically at rent increases for new lets in the UK, Zoopla reported a slow in growth to 6.6%, down from a high of 16% in October 2021.
London is leading the slowdown, with rents rising by 3.7%, down from 13% last year.
On the other hand, growth for renewed tenancies has increased, with annual renewal rents up 8.8% for the year ending May 2024, compared to 8.3% in April according to Hamptons.
Different prospects for home ownership across the UK
The TDS Charitable Foundation’s latest Voice of the Tenant Survey found that 69% of tenants would like to become homeowners.
However, affordability remains a key issue with over a third of tenants already struggling to afford their current rents.
Nationwide recorded a rise of 0.2% in house prices across the UK in June 2024 compared with a year ago.
Increases were higher in Wales and Scotland (both at 1.4%) than in England (0.6%).
Northern Ireland saw the highest increases, with prices up 4.1%.
It continues to remain cheaper to rent than buy across some parts of the UK, because in certain areas mortgage repayments are significantly higher than monthly rents.
According to Hamptons, the average renter in London would find themselves paying an extra £775 per month if they were to become a homeowner.
On the other hand, renters in Northern England and Scotland would pay an addition of up to £100.
These figures do not account for the upfront costs, including a deposit, required for homeownership.
