According to property portal Rightmove's latest data from their rental trends tracker, average asking rents outside of London hit another new record of £1,126 per calendar month (pcm), rising 3.5% from last quarter and by 11.8% compared to last year.
This increase in average asking rents means that rents outside of London are rising at the highest annual rate Rightmove has ever recorded in 16 years of reporting. Rents have now risen by 19% (+£177) since the pandemic started two years ago.
By contrast, it took eight years pre-pandemic to reach the same level of growth, illustrating the rapid rise in asking rents since the start of the pandemic. This quarter's 3.5% jump is the second highest quarterly rise in ten years.
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Rents in London have reached a new record average asking rent of £2,257 pcm this quarter. Annual growth in asking rents in London is now at 15.8%, the fastest ever rate of any region, but according to the company, Wales has experienced the second highest annual fastest rent increase at 15.1%.
Rightmove's director of property science Tim Bannister says: "The story of the rental market continues to be one of high tenant demand but not enough available homes to meet that demand. Last year we saw exceptional numbers of tenants looking to move and this year we have seen no let-up in this trend.
"Whilst stock levels are beginning to improve, with June seeing the highest number of new rental listings coming to market so far this year in the UK, the wide gap that has been created between supply and demand over the last two years will take time to narrow. Until then, this imbalance will continue to support asking rent growth. This has led to our revised forecast of a 8% rise in asking rents by the end of the year, up from 5%."
When looking at the UK as broken down into regions, Wales comes second on the list just behind London for the fastest growing rent prices with a 15.1% annual increase, to an average of £926 per calendar month.
The rental sector in Wales is due to come under new housing laws via the Welsh government Renting Homes Act that are due to come into force from December 1, 2022, pushed back from the initial July 2022 introduction date, that covers both tenants and landlords and could have an effect on property availability and rental prices in the nation.
The act aims to improve how properties are rented, managed, and lived in and, according to Climate Change Minister Julie James, will make the renting process 'simpler and more transparent.' Julie James said: "This Act represents the biggest change to housing law in Wales for decades.
"The Act will make it simpler and easier to rent a home in Wales, replacing various, complex pieces of existing legislation and case law with one clear legal framework. When in place, contract-holders in Wales will have greater security of tenure than in any other part of the UK." Find out how the new renting homes act and regulations might affect you here.
Although there is still a shortage of available homes to rent across the UK in general according to Rightmove, there continues to be signs of this improving. The number of new rental listings is up 8% since the start of the year with June experiencing the highest number of new rental listings coming to the market of any month of 2022, so far.
Despite these encouraging signs, available rental stock is still down 26% compared to last year's levels, while demand is up 6%, which means competition between tenants remains extremely fierce.
Affordability analysis from Rightmove shows that due to historically low interest rates, average mortgage payments on properties with two bedrooms or fewer have risen by 13% in the last ten years, while equivalent rental payments on the same properties have risen by 40%.
Despite challenges such as navigating legislation changes and potential updates to EPC requirements, more landlords are planning to expand their portfolio than reduce it, a sign of confidence in the market say Rightmove.
A third (34%) of landlords recently surveyed said they plan to expand their portfolio during the next 12 months compared with 11% who plan to reduce the number of homes they rent out; it remains to be seen how the new legislation in Wales might affect this figure in Wales.
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