interactive investor comments on ONS private rents in England study.
Commenting, Myron Jobson, Senior Personal Finance Analyst, interactive investor, says: “The new ONS study on private rental properties suggests the cost burden for tenants is going through the roof at a time when many can least afford it amid rampant inflation.
“More than half the rental properties ONS statisticians tracked in England have become more expensive for tenants in the space of a year to February 2023. This is up from 36% for the previous year.
"Rental price rises are most prevalent in London, with over two-thirds of rents monitored by the ONS increasing over the 12-month period, which is somewhat reflective of the increase in demand last year, recovering from a Covid-induced fall a year earlier.
“The cost-of-living crisis had already caused many to reconsider living in London, but high rent inflation has seen many leaving the capital in droves in search for a more affordable existence.
“Soaring rents and expensive food prices are driving inflation, and this inflationary pressure will only grow as more renters sign contracts with a higher cost burden. Rising interest rates could also pile more misery on tenants. As well as pushing up mortgage costs for homeowners, the base rate hike could also see a rise in rents as landlords seek to cover their own rising costs.
“It is becoming increasingly important for tenants to plan ahead to ensure they don’t find themselves in a position where they can no longer afford their rent.
“It is worth having a conversation with your landlord to see if you should expect an increase in rent when your contract is up for renewal. Don’t be afraid to haggle. Finding a new tenant could come at a considerable cost to landlords and keeping you as a tenant could be the most economical solution for both parties. If you can’t afford the higher rent, do your research about where you might want to move. Be sure to weigh up the cost of moving with the cost of the rent increases.
“The increase in rents also highlights the importance of maintaining a rainy-day fund - three to six months’ salary worth or more if you can afford it. It can help you bridge financial gaps until you find a situation that’s more financially feasible.”
- The ONS says collecting price data from privately rented properties every 12 months, on average, ("revisiting") enables rental price changes of individual properties to be tracked over time.
- The proportion of privately rented properties in England revisited in February 2023 that had experienced a price increase was 50.6%, up from 36.0% of those revisited in February 2022.
- The proportion of privately rented properties revisited in February 2023 that had experienced a price increase was highest in London (66.8%) and lowest in the North West (27.9%).
- The ONS data can be found here.
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