12.3 C
Lancashire
Tuesday, June 18, 2024

Are Average Rent Prices Rising Faster Than Average Salaries in the UK?

Recent research conducted by LandlordBuyer suggests that over the past 12 months, average salaries have seen a more significant increase compared to average private rental costs.

What Does the Latest Rental Price and Average Salary Data Indicate?

  • Over the past year, average rent prices in England have increased by 5.12%. However, weekly regular pay has shown a greater increase of 7.17% over the same period (rising from £572 to £613).
  • Excluding London, the average private rental price in the UK stands at £1,037 per month.
  • London experienced its highest-ever annual rental price percentage increase in the last 12 months, with a 5.5% rise from August 2022 to August 2023.
  • In the second quarter of 2023 (April to June), annual growth in regular pay (excluding bonuses) reached 7.8%, marking the highest regular annual growth rate since comparable records began in 2001.

Where Can You Find the Most Affordable Rental Regions in the Country?

The North East of England ranks as the most affordable region, with monthly rental prices averaging just £636. This is closely followed by Yorkshire and The Humber, where the average rent costs £836 per month.

What Do Property Experts Predict for the Future of Rental Costs in Relation to Salaries?

Jason Harris-Cohen, Managing Director of LandlordBuyer, offers his insights: “The UK’s rental market is subject to a ‘robbing Peter to pay Paul’ scenario. While rising wages mean tenants have more take-home pay, income increases are being spent on rising rents. There really is no current advantage to getting a pay rise, especially if it pushes someone into a higher take bracket – they could actually end up with less money.

There will be a tipping point in the private rental market and I don’t think it’s that far away. Landlords will not be able to keep raising rents indefinitely. Each area and property type will have its ceiling limit. Breach this and the landlord runs the risk of rent arrears, with many tenants already struggling with living costs. Pitch the rent too low and the landlord won’t be able to cover their own expenses.
Landlords exiting the market is making matters worse. The more that leave, the less choice there is and increased competition for rentals will naturally push rents up.
A backdrop to all of this is higher mortgage rates. Despite lenders cutting rates in late summer and early autumn, the reductions are minimal – there’s still a huge gulf between the circa 2% rates we saw three, four years ago and the new normal of 5-6%. This is going to come as a huge shock to landlords coming off fixed-rate buy-to-let mortgages. Realistically, but-to-let may soon become a small pool of mortgage-free properties and cash-buying landlords.
Property investors looking for a silver lining will know that high mortgage rates also keep tenants in rented accommodation. Even with house prices slowly drifting downwards, many first-time buyers simply can’t afford the deposit, stamp duty, mortgage arrangement fee, legal costs and monthly mortgage repayments needed to become a homeowner. Therefore it was no surprise that Zoopla recently declared renting was cheaper than mortgage repayments for the first time in 13 years.”
Sam Allcock
Sam Allcockhttps://businesslancashire.co.uk/
Sam Allcock is a highly regarded digital entrepreneur with over 20 years’ experience in online marketing for some of the World’s biggest brands. He has extensive knowledge and experience in SEO and digital marketing. He is based in Cheshire but has an interest in all things going on in the North West and enjoys contributing local news to the site.
spot_imgspot_img

Latest

Scott Dylan on AI’s Future: Ethical Challenges and Real-World Impact

Scott Dylan discusses the ethical aspects and transformative potential...

US Open 2024: DeChambeau beats McIlroy with golf ‘shot of life’

Bryson DeChambeau said he had hit "the shot of...

Five effective PR strategies for care home providers revealed

In the competitive social care landscape, care home providers...

Best Horse Racing Betting Apps In The UK – June 2024

If you are looking for the top horse racing...
spot_img

Subscribe to our newsletter

Business Lancashire will use the information you provide on this form to be in touch with you and to provide updates and marketing.

Don't miss

Scott Dylan on AI’s Future: Ethical Challenges and Real-World Impact

Scott Dylan discusses the ethical aspects and transformative potential...

Remember these seven live casino tips for your next game

Live casinos have changed online gaming as we know...

College sustainability expert helps homeless charity save thousands on energy costs 

Nelson and Colne College’s sustainability expert has teamed up...

More News

National Association of Professional Sourcing Agents (NAPSA) Shortlisted for Prestigious Service Provider of the Year Award

The National Association of Professional Sourcing Agents (NAPSA) is delighted to announce its nomination for the prestigious Service Provider of the Year Award at...

LandlordBuyer Reports a Startling Increase in Landlord Possession Actions and Repossessions in Recent Study

LandlordBuyer's latest research has uncovered an alarming escalation in landlord possession claims and repossessions for the last quarter of 2023, with totals reaching 23,282...

incspaces launches all-in-one Virtual Office and Desk Space subscription

incspaces, a leading provider of innovative workspace solutions, is proud to announce the launch of Infinity Office™, the UK’s first all-in-one virtual office and...